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Optimal Tariffs in the Presence of Middlemen

  • Lahiri, S.
  • Ono, Y.

In this paper, the authors examine the question of optimal tariffs when producers and sellers are different entities. A number of alternative market structures are considered. It is found that the sign of the optimal tariff may depend on the nature of the producer-seller relationship, viz., who the leader is. In particular, the authors find that the optimal tariff is negative when the only seller is the leader and there is only one foreign producer. There is also a case where it is optimal for the government of the home country to subsidize imports no matter who the leader is.

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Paper provided by Institute of Social and Economic Research, Osaka University in its series ISER Discussion Paper with number 0389.

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Length: 17 pages
Date of creation: 1995
Date of revision:
Handle: RePEc:dpr:wpaper:0389
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