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| Gervais, Jean-Philippe; Lapan, Harvey E.. |
| This paper investigates the strategic behavior between countries that have purchasing power on the world market for a certain good. Tariffs and quotas are not equivalent protection instruments in this oligopsonistic market. Policy active importers would be better off by colluding and setting their trade instrument cooperatively. In a non-cooperative setting, if production decisions occur before consumption decisions, the ex-ante optimal policy is not time consistent because the ex-post elasticity of the residual foreign export supply curve is lower than the ex-ante elasticity. However, we show that the importers' inability to irrevocably commit to their trade instrument may be welfare superior to the precommitment solution. The negative welfare... |
| Tipo: Working or Discussion Paper |
Palavras-chave: Precommitment; Time consistency; Optimal tariff and quota; Oligopsony; International Relations/Trade; F13; Q17; D4. |
| Ano: 1998 |
URL: http://purl.umn.edu/18239 |
