EconPapers    
Economics at your fingertips  
 

Tariff Revenue Competition in a Free Trade Area: The Case of Asymmetric Large Countries

Taiji Furusawa () and Naoto Jinji ()

Review of Development Economics, 2007, vol. 11, issue 2, 300-312

Abstract: The striking result has been shown by Richardson that tariff revenue competition between two symmetric member countries of a free trade area (FTA) results in complete elimination of external tariffs if there exists a pure‐strategy Nash equilibrium at all. Richardson also conjectures without building a model that if member countries are asymmetric in market size, there exists a pure‐strategy Nash equilibrium in which both countries set positive external tariffs. We explicitly extend his tariff competition model into the case of asymmetric FTA member countries, and confirm his conjecture. We also show that there exists a mixed‐strategy Nash equilibrium in the case of symmetric countries.

Date: 2007
References: View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
https://doi.org/10.1111/j.1467-9361.2007.00402.x

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:rdevec:v:11:y:2007:i:2:p:300-312

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1363-6669

Access Statistics for this article

Review of Development Economics is currently edited by E. Kwan Choi

More articles in Review of Development Economics from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().

 
Page updated 2021-06-14
Handle: RePEc:bla:rdevec:v:11:y:2007:i:2:p:300-312