IDEAS home Printed from
   My bibliography  Save this paper

Tariffs in a Dynamic Differentiated Duopoly


  • Beverly J. Lapham


The effects of an unilateral tariff on prices, quantities, and welfare in the presence of a dynamic elements facing imperfectly competitive firms is examined. International duopolists, selling differentiated products, interact strategically in price setting game under the tariff policy. It is shown that the presence of dynamic elements in the form of adjustment costs to changing sales volume significantly affect the relationship between tariff rates and aggregate domestic welfare even when sales are constant and no adjustment costs are actually paid. The level of optimal tariffs is associated with higher adjustment costs. Of particular interest is the possibility that autarky is optimal under positive adjustment costs while tariff restricted trade is optimal in the absence of such costs.

Suggested Citation

  • Beverly J. Lapham, 1991. "Tariffs in a Dynamic Differentiated Duopoly," Working Papers 823, Queen's University, Department of Economics.
  • Handle: RePEc:qed:wpaper:823

    Download full text from publisher

    File URL:
    File Function: First version 1991
    Download Restriction: no

    References listed on IDEAS

    1. Gupta, Kanhaya L, 1971. "Aggregation Bias in Linear Economic Models," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 12(2), pages 293-305, June.
    2. repec:qed:wpaper:37 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    More about this item


    Access and download statistics


    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:qed:wpaper:823. 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: (Mark Babcock). General contact details of provider: .

    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.

    We have no references for this item. You can help adding them by using 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.