A differential game model of tariff war
AbstractWe present a simple two(-country) by two(-good) differental game model of international trade in which the governments of the two countries play a tariff-setting game. We explicitly derive a unilateral optimum tarifff rate and then a Markov-perfect equilibrium pair of tariff strategies (bilateral optimum tariff strategies) and compare the welfare level of each country among autarchic, free-trade, unilateral and bilateral optimum-tariff equilibria.
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Bibliographic InfoArticle provided by Elsevier in its journal Japan and the World Economy.
Volume (Year): 13 (2001)
Issue (Month): 3 (August)
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Web page: http://www.elsevier.com/locate/inca/505557
Other versions of this item:
- D90 - Microeconomics - - Intertemporal Choice - - - General
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
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