IDEAS home Printed from https://ideas.repec.org/a/bla/jeurec/v12y2014i1p177-199.html
   My bibliography  Save this article

Trade Quotas And Buyer Power, With An Application To The E.U. Natural Gas Market

Author

Listed:
  • Svetlana Ikonnikova
  • Gijsbert T.J. Zwart

Abstract

We consider a market in which domestic buyers negotiate contracts with foreign sellers, and explore how trade quotas can help to increase the buyers' countervailing power. We use the Shapley value to describe bargaining power and the distribution of the trade surplus in such a bilateral oligopoly. By exploiting strategic externalities among the buyers, bilateral trade quotas can improve the buyers' bargaining positions. In contrast, aggregate trade restrictions on all buyers' trade never improve buyer surplus. Minimum quotas on imports from fringe suppliers can benefit nonaffected buyers, as these enjoy positive externalities. We apply these insights to the E.U. market for natural gas and show that the effects of trade quotas on E.U. gas importers' power can be significant.

Suggested Citation

  • Svetlana Ikonnikova & Gijsbert T.J. Zwart, 2014. "Trade Quotas And Buyer Power, With An Application To The E.U. Natural Gas Market," Journal of the European Economic Association, European Economic Association, vol. 12(1), pages 177-199, February.
  • Handle: RePEc:bla:jeurec:v:12:y:2014:i:1:p:177-199
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1111/jeea.12064
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Orlova, Ekaterina & Hubert, Franz, 2014. "Network Access and Market Power," Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100474, Verein für Socialpolitik / German Economic Association.
    2. Robert A. Ritz, 2016. "Strategic investment, multimarket interaction and competitive advantage: An application to the natural gas industry," Cambridge Working Papers in Economics 1603, Faculty of Economics, University of Cambridge.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jeurec:v:12:y:2014:i:1:p:177-199. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum). General contact details of provider: http://edirc.repec.org/data/eeaaaea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.