Gains From Trade in an Asymmetric Cournot World With Trade Costs
Year: 2025
Type: article
Abstract: ABSTRACT We compare free trade with autarky in a partial equilibrium model with asymmetric Cournot competition and linear demand and costs. While the existing literature can only guarantee under strong symmetry without trade costs that trade increases world output, consumer surplus, and total welfare, we show that weaker conditions such as partial symmetry guarantee these global gains from trade in an n ‐country world with trade costs. We also show that free entry and exit ensure that every country gains from trade. Without any additional conditions, trade always increases a social objective function that values consumers twice as much as firms.
DOI: 10.1111/roie.12801
Authors: Rabah Amir, Jim Y. Jin, Michael Troege
Institutions: University of Iowa, University of St Andrews, ESCP Business School
Language: English
Topic: Global trade and economics
Domain: Social Sciences
Open Access status: hybrid
Estimated APC paid: $3,350
OpenAlex ID: W4408482545