| ||||
|
Abstract:
This paper analyzes the effects of a tariff on price-setting duopolists who cannot segment geographically distinct markets; hence, commercial policy has effects in domestic and foreign markets. Although each firm's payoff function is discontinuous, there is a unique equilibrium for an arbitrary tariff. We find that a tariff serves to increase the profits of both the domestic and foreign producer. Moreover, the profits of both firms rise monotonically with the tariff.
PDF files: Adobe Acrobat Reader ZIP files: PKWARE Home | IFDPs | List of 1987 IFDPs Accessibility | Contact Us Last update: November 24, 2008 |
