On the best use of trade controls in the presence of foreign market power

Published

Journal Article

This paper derives optimum tariffs for a country whose trading partner always exploits its own market power but assumes naively that the home country will leave its restriction unchanged. It then shows that a country which is a monopolist or monopsonist will always prefer its best price limit (price floor or ceiling) to its best tariff and prefer free trade to any quota. However, a duopsonist or duopolist will prefer its best quota to its best tariff and free trade to any price limit. Finally, the best import or export tariff of a country which fears retaliation may be negative. © 1983 Elsevier Science Publishers B.V. (North-Holland).

Full Text

Duke Authors

Cited Authors

  • Tower, E

Published Date

  • January 1, 1983

Published In

Volume / Issue

  • 15 / 3-4

Start / End Page

  • 349 - 365

International Standard Serial Number (ISSN)

  • 0022-1996

Digital Object Identifier (DOI)

  • 10.1016/S0022-1996(83)80010-5

Citation Source

  • Scopus