Export cartel and consumer welfare

Arijit Mukherjee and Uday Sinha

Review of International Economics, 2019, vol. 27, issue 1, 91-105

Abstract: The purpose of this paper is to show that export cartels are not necessarily harmful for consumers in the importing countries. Using a strategic trade policy model, we show that, contrary to the harmful effect, product‐market cooperation benefits consumers by affecting the trade policies. We further show that consumers in the importing countries are affected adversely if cooperation is among the governments of the exporting countries, instead of the exporting firms.

Date: 2019
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