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Delegation And Strategic Trade Policy

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Author Info
DAVID R. COLLIE

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Abstract

In a trade policy game where the domestic government uses a tariff and the foreign government uses an export subsidy, it is shown that the domestic government should delegate to a policy-maker who attaches less weight to the profits of the domestic firm than the welfare maximising government. This makes domestic trade policy less aggressive and increases both domestic and foreign welfare. It is even possible that the optimal policy-maker attaches a negative weight to the profits of the domestic firm. [F12,F13]

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Publisher Info
Article provided by Korean International Economic Association in its journal International Economic Journal.

Volume (Year): 11 (1997)
Issue (Month): 3 (October)
Pages: 35-46
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Handle: RePEc:taf:intecj:v:11:y:1997:i:3:p:35-46

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References listed on IDEAS
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.:

  1. David Collie, 1994. "Endogenous timing in trade policy games: Should governments use countervailing duties?," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 130(1), pages 191-209, March. [Downloadable!] (restricted)
  2. 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. [Downloadable!] (restricted)
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  3. Gatsios, Konstantine & Karp, Larry, 1991. "Delegation Games in Customs Unions," Review of Economic Studies, Blackwell Publishing, vol. 58(2), pages 391-97, April. [Downloadable!] (restricted)
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  4. Collie, David, 1991. "Export subsidies and countervailing tariffs," Journal of International Economics, Elsevier, vol. 31(3-4), pages 309-324, November. [Downloadable!] (restricted)
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  5. Dixit, Avinash, 1984. "International Trade Policy for Oligopolistic Industries," Economic Journal, Royal Economic Society, vol. 94(376a), pages 1-16, Supplemen.
  6. Gatsios, Konstantine & Karp, Larry, 1995. "Delegation in a general equilibrium model of customs unions," European Economic Review, Elsevier, vol. 39(2), pages 319-333, February. [Downloadable!] (restricted)
  7. Brander, James A. & Spencer, Barbara J., 1984. "Trade warfare: Tariffs and cartels," Journal of International Economics, Elsevier, vol. 16(3-4), pages 227-242, May. [Downloadable!] (restricted)
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(explanations, 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.)

  1. Currie, David & Levine, Paul L & Rickman, Neil, 1999. "Delegation and the Ratchet Effect: Should Regulators Be Pro-Industry?," CEPR Discussion Papers 2274, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  2. José Méndez Naya, 2002. "Subsidios a la producción y delegación de la política comercial en una unión aduanera," Estudios de Economia, University of Chile, Department of Economics, vol. 29(2 Year 20), pages 231-246, December. [Downloadable!]
  3. Clarke, Roger & Collie, David R., 2006. "Maximum-Revenue versus Optimum-Welfare Export Taxes," Cardiff Economics Working Papers E2006/22, Cardiff University, Cardiff Business School, Economics Section. [Downloadable!]
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