We show that the nature and extent of trade is significantly affected by the pricing policy that firms are allowed to employ. A switch from discriminatory to non-discriminatory pricing (e.g. strict anti-dumping laws) leads to a switch from two-way trade to one-way trade. It is far from true that consumers will necessarily be favoured by such a policy switch. The distribution of gains is also significantly affected by relative country size.
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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number
1590.
Find related papers by JEL classification: F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations K29 - Law and Economics - - Regulation and Business Law - - - Other L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
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