Year: 1983
Type: report
Abstract: National governments have incentives to intervene in international narkets, particularly in encouraging export cartels and in imposing tariffs on imports from imperfectly competitive foreign firms.Although the optimal response to foreign monopoly is usually a tariff, a specific subsidy will be optimal if demand is very convex, as with constant elasticity demand.If ad valorem tariffs or subsidies are considered, a subsidy is optimal if the elasticity of demand increases as consumption increases.The critical conditions in both ad valorern and specific cases hold generally for Courriot ologopoly.Noncooperative international policy equilibrium will be characterized by export cartels and rent-extracting tariffs.
DOI: 10.3386/w1193
Authors: James Brander, Barbara Spencer
Institutions: Boston College, Queen's University
Language: English
Topic: Global trade and economics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2002773733