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Endogenous Lobbying and Protection under Monopolistic Competition

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  • Jaiho Chung

Abstract

This paper studies the “Protection for Sale” model in the setting of monopolistic competition drawing on the quadratic sub-utility model. This model generates two new findings: (1) the average cross-price elasticity, in particular, only among foreign varieties in a sector negatively influences the level of protection; (2) the total number of domestic varieties over one of the foreign varieties in a sector, a new proxy for political power of domestic lobby groups in that sector, positively influences the level of protection.

Suggested Citation

  • Jaiho Chung, 2011. "Endogenous Lobbying and Protection under Monopolistic Competition," Global Economic Review, Taylor & Francis Journals, vol. 40(3), pages 315-322, September.
  • Handle: RePEc:taf:glecrv:v:40:y:2011:i:3:p:315-322 DOI: 10.1080/1226508X.2011.601640
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