Manipulable behavior in international trade
AbstractIn this paper, we present a Cournot duopoly model to analyze the manipulated behavior in international trade. The WTO is assumed as an arbitrator for the exchange in an oligopolistic industry and sets tariff rules according to the SDT principles; a firm's cost is private information both for the WTO and the foreign rivalries. Subsequent to our analysis of several cases we find that a firm may misreport to the WTO for more production revenue and the government may collude with a firm for higher welfare. It is shown that the misreporting and collusion incentives are related to the WTO tariff rule, the misreported cost and market size. Furthermore, a strategy proof tariff rule has been designed in which firms can never make his revenue better off by misreporting production cost.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal Economic Modelling.
Volume (Year): 28 (2011)
Issue (Month): 1-2 (January)
Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/30411
Manipulable behavior Misreport Cournot duopoly Strategy proof tariff rule SDT principles;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Maggi, Giovanni, 1999.
"Strategic Trade Policy under Incomplete Information,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 40(3), pages 571-94, August.
- Maggi, G., 1997. "Strategic Trade Policy Under Incomplete Information," Papers 189, Princeton, Woodrow Wilson School - Public and International Affairs.
- James Brander & Paul Krugman, 1982.
"A 'Reciprocal Dumping' Model of International Trade,"
513, Queen's University, Department of Economics.
- Brander, James & Krugman, Paul, 1983. "A 'reciprocal dumping' model of international trade," Journal of International Economics, Elsevier, vol. 15(3-4), pages 313-321, November.
- James A. Brander & Paul Krugman, 1983. "A 'Reciprocal Dumping' Model of International Trade," NBER Working Papers 1194, National Bureau of Economic Research, Inc.
- James Brander & Paul Krugman, 1980. "A "Reciprocal Dumping" Model of International Trade," Working Papers 405, Queen's University, Department of Economics.
- Wright, Donald J, 1998.
"Strategic Trade Policy and Signalling with Unobservable Costs,"
Review of International Economics,
Wiley Blackwell, vol. 6(1), pages 105-19, February.
- Donald Wright, . "Strategic Trade Policy and Signalling with Unobservable Costs," Discussion Papers 95/6, Department of Economics, University of York.
- Wright, D.J., 1994. "Strategic Trade Policy and Signalling with Unobservable Costs," Working Papers 198, University of Sydney, School of Economics.
- Eaton, Jonathan & Grossman, Gene M, 1986.
"Optimal Trade and Industrial Policy under Oligopoly,"
The Quarterly Journal of Economics,
MIT Press, vol. 101(2), pages 383-406, May.
- Jonathan Eaton & Gene M. Grossman, 1986. "Optimal Trade and Industrial Policy Under Oligopoly," NBER Working Papers 1236, National Bureau of Economic Research, Inc.
- Matschke, Xenia, 2003. "Tariff and quota equivalence in the presence of asymmetric information," Journal of International Economics, Elsevier, vol. 61(1), pages 209-223, October.
- Collie, David & Hviid, Morten, 1993. " Export Subsidies as Signals of Competitiveness," Scandinavian Journal of Economics, Wiley Blackwell, vol. 95(3), pages 327-39.
- Collie, David R & Hviid, Morten, 1999. "Tariffs as Signals of Uncompetitiveness," Review of International Economics, Wiley Blackwell, vol. 7(4), pages 571-79, November.
- Herander, Mark G & Kamp, Brad, 1999. "Tariff Policy and Entry with Cost-Based Informational Asymmetries," Economic Inquiry, Western Economic Association International, vol. 37(1), pages 60-73, January.
- Brainard, S.L. & Martimort, D., 1992.
"Strategic Trade Policy with Incompletely Informed Policymakers,"
92.277, Toulouse - GREMAQ.
- Brainard, S. Lael & Martimort, David, 1997. "Strategic trade policy with incompletely informed policymakers," Journal of International Economics, Elsevier, vol. 42(1-2), pages 33-65, February.
- S. Lael Brainard & David Martimort, 1992. "Strategic Trade Policy With Incompletely Informed Policymakers," NBER Working Papers 4069, National Bureau of Economic Research, Inc.
- Michalopoulos, Constantine, 2000. "The role of special differential treatment for developing countries in GATT and the World Trade Organization," Policy Research Working Paper Series 2388, The World Bank.
- Brander, James A. & Spencer, Barbara J., 1985.
"Export subsidies and international market share rivalry,"
Journal of International Economics,
Elsevier, vol. 18(1-2), pages 83-100, February.
- James A. Brander & Barbara J. Spencer, 1984. "Export Subsidies and International Market Share Rivalry," NBER Working Papers 1464, National Bureau of Economic Research, Inc.
- David P. Baron & Roger B. Myerson, 1979.
"Regulating a Monopolist with Unknown Costs,"
412, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Brainard, S Lael & Martimort, David, 1996. "Strategic Trade Policy Design with Asymmetric Information and Public Contracts," Review of Economic Studies, Wiley Blackwell, vol. 63(1), pages 81-105, January.
- Zigic, Kresimir, 1998. "Strategic Trade Policy: How Important is the International Constraint? The Case of Optimal Tariff When Technological Innovations Spill Over to the Foreign Competitor," CEPR Discussion Papers 1957, C.E.P.R. Discussion Papers.
- David de Meza, 1986. "Export Subsidies and High Productivity: Cause or Effect?," Canadian Journal of Economics, Canadian Economics Association, vol. 19(2), pages 347-50, May.
- Dixit, Avinash, 1984. "International Trade Policy for Oligopolistic Industries," Economic Journal, Royal Economic Society, vol. 94(376a), pages 1-16, Supplemen.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wendy Shamier).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.