Optimal Polocies with Strategic Distortions
Recent work in optimal trade policy for imperfectly competitive markets usually identifies the optimal level of an instrument, and when more instruments are allowed, general interpretations have been unavailable, This paper analyzes the jointly optimal levels of a Variety of instruments with oligopolistic competition. A targeting principle for identifying optimal policies is derived using the concept of a "strategic distortion." It is shown how optimal policies vary with the distortions present and the number of firms, as well as assumptions about market segmentation and regulation. The principles of targeting are illustrated using agricultural marketing boards.
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|Date of creation:||1991|
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- Markusen, James R., 1984. "The welfare and allocative effects of export taxes versus marketing boards," Journal of Development Economics, Elsevier, vol. 14(1), pages 19-36.
- Dixit, Avinash, 1984. "International Trade Policy for Oligopolistic Industries," Economic Journal, Royal Economic Society, vol. 94(376a), pages 1-16, Supplemen.
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"International R & D Rivalry and Industrial Strategy,"
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1464, National Bureau of Economic Research, Inc.
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- Martin K. Perry, 1982. "Oligopoly and Consistent Conjectural Variations," Bell Journal of Economics, The RAND Corporation, vol. 13(1), pages 197-205, Spring.
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- Kala Krishna & Motoshige Itoh, 1986.
"Content Protection and Oligopolistic Interactions,"
NBER Working Papers
1843, National Bureau of Economic Research, Inc.
- Just, Richard E & Schmitz, Andrew & Zilberman, David, 1979. "Price Controls and Optimal Export Policies under Alternative Market Structures," American Economic Review, American Economic Association, vol. 69(4), pages 706-14, September.
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