Network Externalities, Transport Costs and Tariffs

Kenji Fujiwara (kenjifujiwara@kwansei.ac.jp)

No 53, Discussion Paper Series from School of Economics, Kwansei Gakuin University

Abstract: This paper formulates a reciprocal market model of international duopoly with network externalities to reconsider welfare effects of reductions in transport costs and tariffs. Depending on the magnitude of network externalities, we show two possibilities. One of them, which emerges under strong network externalities, illustrates that freer trade unambiguously improves welfare for any initial level of trade barriers. This finding provides an affirmative evaluation of freer trade.

Keywords: network externality; duopoly; transport costs; tariffs (search for similar items in EconPapers)
Pages: 15 pages
Date: 2010-04, Revised 2010-04
New Economics Papers: this item is included in nep-int, nep-net and nep-ure
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http://192.218.163.163/RePEc/pdf/kgdp53.pdf First version, 2010 (application/pdf)

Related works:
Journal Article: Network externalities, transport costs, and tariffs (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:kgu:wpaper:53

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