Year: 1994
Type: article
Abstract: This paper derives trade policy rankings for a country trading with a foreign monopoly firm. It characterizes the first-best policy under decreasing monopoly costs, and itdemonstrates that a minimum import requirement implements first-best trade only under constant monopoly costs. The paper shows further that a voluntary import expansion eliminates all gains from trading with the monopoly, and that all quotas and voluntary export restraints are equivalent. Finally, it establishes that a price ceiling and a minimum import requirement are equivalent when monopoly costs are constant or decreasing, but that their ranking is ambiguous when costs are increasing.
Author: Carsten Kowalczyk
Institutions: Dartmouth College, National Bureau of Economic Research
Language: English
Topic: Global trade and economics
Domain: Social Sciences
Open Access status: hybrid
Estimated APC paid: $4,300
OpenAlex ID: W1966197865