Effects of Tariff on International Mixed Duopoly with Several Markets

Koji Okuguchi

No 93, CESifo Working Paper Series from CESifo

Abstract: First, we formulate international multi-market mixed duopoly consisting of one labor-managed firm (economy) and one profit-maximizing firm (economy), which is shown to have a unique Cournot equilibrium under a set of reasonable assumptions. Second, we examine the effects of the LME´s tariff imposed on its imports from the PME. We find that the tariff has ambiguous effects on both LME´s and PME´s equilibrium total outputs. This result is in sharp contrast with the one obtained for international multi-market duopoly comprising two profit-maximizing firms with decreasing marginal costs.

Date: 1995
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