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The structure of Nash equilibrium tariffs

  • Yoshitomo Ogawa

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    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

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    File URL: http://hdl.handle.net/10.1007/s00199-010-0599-x
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    Article provided by Springer in its journal Economic Theory.

    Volume (Year): 51 (2012)
    Issue (Month): 1 (September)
    Pages: 139-161

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    Handle: RePEc:spr:joecth:v:51:y:2012:i:1:p:139-161
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    1. 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..
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    11. Bhagwati, Jagdish N & Kemp, Murray C, 1969. "Ranking of Tariffs under Monopoly Power in Trade," The Quarterly Journal of Economics, MIT Press, vol. 83(2), pages 330-35, May.
    12. 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 341-70, May.
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    15. Yoshitomo Ogawa, 2007. "The structure of optimal tariff rates in a large country with market power," Economic Theory, Springer, vol. 33(2), pages 271-283, November.
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