Optimal Tariffs in Consistent Conjectural Variations Equilibrium
AbstractThis paper analyzes the determination of the optimal tariff under the assumption of Consistent Conjectural Variations (CCV). A general characterization of the CCV equilibrium is given. We show that (i) there are, in general, a multiplicity of such equilibria, and (ii) under certain restrictions, the Cournot equilibrium, which is based on the assumption of no retaliation can also be a CCV equilibrium. By contrast, free trade is never a CCV equilibrium. Finally the CCV equilibrium is solved explicitly in a simple example.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 1872.
Date of creation: Mar 1986
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Publication status: published as Turnovsky, Stephen J. "Optimal Tariffs in Consistent Conjectural Variations Equilibrium," Journal of International Economics, Vol. 21, No. 3, (November 1986), pp. 301-312.
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- Turnovsky, Stephen J., 1986. "Optimal tariffs in consistent conjectural variations equilibrium," Journal of International Economics, Elsevier, vol. 21(3-4), pages 301-312, November.
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"Optimal Trade and Industrial Policy Under Oligopoly,"
NBER Working Papers
1236, National Bureau of Economic Research, Inc.
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