Endogenous Choice of Trade Instrument Under Uncertainty
AbstractThis paper endogenizes the choice between import tariffs and quotas of two policy active countries in a duopsonistic world market. Without uncertainty, import quotas are welfare superior to import tariffs in equilibrium. If two importers can precommit to a type of instrument before deciding the level of the instrument to use in a future period, an import quota equilibrium emerges. We introduce asymmetric risk in the import demand schedule of the two importers. There exists a range of parameters in which a mixed equilibrium emerges; i.e. one country uses a tariff while the other restricts trade with an import quota. The likelihood that both importers choose a different trade instrument in equilibrium is increasing with the correlation coefficient of the two random shocks.
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoPaper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 5135.
Date of creation: 01 Jan 2002
Date of revision:
Publication status: Published in International Economic Journal 2002, vol. 16 no. 4
Contact details of provider:
Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
Phone: +1 515.294.6741
Fax: +1 515.294.0221
Web page: http://www.econ.iastate.edu
More information through EDIRC
Other versions of this item:
- Gervais Jean-Philippe & Harvey E. Lapan, 2002. "Endogenous Choice of Trade Instrument Under Uncertainty," International Economic Journal, Taylor & Francis Journals, vol. 16(4), pages 75-96.
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.:
- Gervais, Jean-Philippe & Lapan, Harvey E., 2001.
"Optimal Production Tax and Quota Under Time Consistent Trade Policies,"
Staff General Research Papers
5049, Iowa State University, Department of Economics.
- Jean-Philippe Gervais & Harvey E. Lapan, 2001. "Optimal Production Tax and Quota under Time Consistent Trade Policies," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(4), pages 921-933.
- Karp, Larry & Newbery, David M., 1991. "Optimal tariffs on exhaustible resources," Journal of International Economics, Elsevier, vol. 30(3-4), pages 285-299, May.
- Copeland, Brian R & Tower, Edward & Webb, Michael A, 1989. "On Negotiated Quotas, Tariffs, and Transfers," Oxford Economic Papers, Oxford University Press, vol. 41(4), pages 774-88, October.
- Bergstrom, Theodore C, 1982. "On Capturing Oil Rents with a National Excise Tax," American Economic Review, American Economic Association, vol. 72(1), pages 194-201, March.
- Fishelson, Gideon & Flatters, Frank, 1975. "The (non)equivalence of optimal tariffs and quotas under uncertainty," Journal of International Economics, Elsevier, vol. 5(4), pages 385-393, November.
- Young, Leslie & Anderson, James E, 1982. "Risk Aversion and Optimal Trade Restrictions," Review of Economic Studies, Wiley Blackwell, vol. 49(2), pages 291-305, April.
- Nirvikar Singh & Xavier Vives, 1984. "Price and Quantity Competition in a Differentiated Duopoly," RAND Journal of Economics, The RAND Corporation, vol. 15(4), pages 546-554, Winter.
- Falvey, Rodney E & Lloyd, P J, 1991. "Uncertainty and the Choice of Protective Instrument," Oxford Economic Papers, Oxford University Press, vol. 43(3), pages 463-78, July.
- Dasgupta, Partha & Stiglitz, Joseph E, 1977. "Tariffs vs . Quotas as Revenue Raising Devices under Uncertainty," American Economic Review, American Economic Association, vol. 67(5), pages 975-81, December.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Stephanie Bridges) The email address of this maintainer does not seem to be valid anymore. Please ask Stephanie Bridges to update the entry or send us the correct address.
If references are entirely missing, you can add them using this form.