Unilateral and Multilateral Gains from Trade in International Oligopoly

Kenji Fujiwara ()

The Economic Record, 2005, vol. 81, issue 255, 404-413

Abstract: Constructing a two‐agent model of international duopoly with increasing returns, the present paper examines potential gains from free trade. It is shown that under certain conditions, both agents in a country become worse off in free trade than in autarky with no redistribution. Further, the lump‐sum compensation can never achieve a Pareto‐improvement in such an economy. However, we can find a non‐lump‐sum redistributive scheme that makes nobody in the country worse off in free trade than in autarky.

Date: 2005
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https://doi.org/10.1111/j.1475-4932.2005.00278.x

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