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Negotiated tariffs in free entry oligopoly under integrated markets

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  • Yasuhito Tanaka

Abstract

Using the Nash bargaining approach, this paper analyzes the negotiation of tariffs between two countries in free-entry oligopolies under integrated markets. Employing a symmetric model with linear demand and cost functions, the paper shows that for both countries Pareto-efficient negotiated tariffs are larger than the tariffs at the Nash equilibrium of a non-cooperative tariff game (tariff war) in which each country imposes its optimum tariff. Copyright Kluwer Academic Publishers 1991

Suggested Citation

  • Yasuhito Tanaka, 1991. "Negotiated tariffs in free entry oligopoly under integrated markets," Open Economies Review, Springer, vol. 2(2), pages 165-181, June.
    • Handle: RePEc:kap:openec:v:2:y:1991:i:2:p:165-181
    DOI: 10.1007/BF01886898
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    References listed on IDEAS

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    Cited by:

    1. Wang, Leonard F.S. & Lee, Jen-Yao, 2012. "Domestic entry, optimum-welfare and maximum-revenue tariffs," Research in Economics, Elsevier, vol. 66(1), pages 106-109.
    2. Tanaka, Yasuhito, 1993. "Welfare Enhancing Tariff War in Duopoly with Product Differentiation," Economic Review, Hitotsubashi University, vol. 44(1), pages 15-22, January.
    3. Wang, Leonard F.S., 2016. "Do industrial and trade policy lead to excess entry and social inefficiency?," International Review of Economics & Finance, Elsevier, vol. 43(C), pages 354-362.

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