IDEAS home Printed from https://ideas.repec.org/a/spr/joecth/v51y2012i1p139-161.html
   My bibliography  Save this article

The structure of Nash equilibrium tariffs

Author

Listed:
  • Yoshitomo Ogawa

    ()

Abstract

This paper examines theoretically the structure of optimal (Nash equilibrium) tariff rates in a two-country economy with more than two traded goods. We provide a condition under which the equilibrium tariff rates are uniform in both countries, and explore the relative size of the equilibrium tariff rates in each country when the uniform tariff condition is not satisfied. The elasticities of compensated excess demand for goods play an important role in characterizing the structure of the equilibrium tariff rates. This paper undertakes the analysis using a dual approach. Copyright Springer-Verlag 2012

Suggested Citation

  • Yoshitomo Ogawa, 2012. "The structure of Nash equilibrium tariffs," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 51(1), pages 139-161, September.
  • Handle: RePEc:spr:joecth:v:51:y:2012:i:1:p:139-161 DOI: 10.1007/s00199-010-0599-x
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s00199-010-0599-x
    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.

    References listed on IDEAS

    as
    1. Feenstra, Robert C., 1986. "Trade policy with several goods and market linkages," Journal of International Economics, Elsevier, pages 249-267.
    2. Makrydakis, Stelios & Tzavalis, Elias & Balfoussias, Athanassios, 1998. "Policy regime changes and the long-run sustainability of fiscal policy: an application to Greece," Economic Modelling, Elsevier, pages 71-86.
    3. Lockwood, Ben & Wong, Kar-yiu, 2000. "Specific and ad valorem tariffs are not equivalent in trade wars," Journal of International Economics, Elsevier, pages 183-195.
    4. Bond, Eric W, 1990. "The Optimal Tariff Structure in Higher Dimensions," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 31(1), pages 103-116, February.
    5. Earl Grinols & Peri Silva, 2011. "Rules of origin and gains from trade," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), pages 159-173.
    6. Otani, Yoshihiko, 1980. "Strategic Equilibrium of Tariffs and General Equilibrium," Econometrica, Econometric Society, vol. 48(3), pages 643-662, April.
    7. Carsten Kowalczyk & Raymond Riezman, 2009. "Free trade: what are the terms-of-trade effects?," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), pages 147-161.
    8. W. M. Gorman, 1958. "Tariffs, Retaliation, and the Elasticity of Demand for Imports," Review of Economic Studies, Oxford University Press, vol. 25(3), pages 133-162.
    9. Zissimos, Ben, 2009. "Optimum tariffs and retaliation: How country numbers matter," Journal of International Economics, Elsevier, pages 276-286.
    10. Carsten Kowalczyk & Raymond Riezman, 2013. "Free trade: what are the terms-of-trade effects?," World Scientific Book Chapters,in: International Trade Agreements and Political Economy, chapter 10, pages 149-164 World Scientific Publishing Co. Pte. Ltd..
    11. Syropoulos, Constantinos, 2003. "Rules for the disposition of tariff revenues and the determination of common external tariffs in customs unions," Journal of International Economics, Elsevier, pages 387-416.
    12. Earl Grinols & Peri Silva, 2011. "Rules of origin and gains from trade," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), pages 159-173.
    13. Christian Broda & Nuno Limao & David E. Weinstein, 2008. "Optimal Tariffs and Market Power: The Evidence," American Economic Review, American Economic Association, pages 2032-2065.
    14. Tower, Edward, 1977. "Ranking the optimum tariff and the maximum revenue tariff," Journal of International Economics, Elsevier, pages 73-79.
    15. W. J. Corlett & D. C. Hague, 1953. "Complementarity and the Excess Burden of Taxation," Review of Economic Studies, Oxford University Press, vol. 21(1), pages 21-30.
    16. Jagdish Bhagwati & Murray C. Kemp, 1969. "Ranking of Tariffs under Monopoly Power in Trade," The Quarterly Journal of Economics, Oxford University Press, vol. 83(2), pages 330-335.
    17. John Kennan & Raymond Riezman, 2013. "Do Big Countries Win Tariff Wars?," World Scientific Book Chapters,in: International Trade Agreements and Political Economy, chapter 4, pages 45-51 World Scientific Publishing Co. Pte. Ltd..
    18. Young, Leslie, 1991. "Optimal Tariffs: A Generalization," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 32(2), pages 341-370, May.
    19. T. de Scitovszky, 1942. "A Reconsideration of the Theory of Tariffs," Review of Economic Studies, Oxford University Press, vol. 9(2), pages 89-110.
    20. Yoshitomo Ogawa, 2007. "The structure of optimal tariff rates in a large country with market power," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), pages 271-283.
    21. Mukrat C. Kemp, 1967. "Notes on the Theory of Optimal Tariffs," The Economic Record, The Economic Society of Australia, vol. 43(3), pages 395-404, September.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Nash equilibrium tariff; Uniformity; Own-price elasticity; Cross-elasticity; F11; F13;

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

    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:spr:joecth:v:51:y:2012:i:1:p:139-161. 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: (Sonal Shukla) or (Rebekah McClure). General contact details of provider: http://www.springer.com .

    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.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with 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.