Equilibrium parallel import policies and international market structure

Santanu Roy and Kamal Saggi ()

Journal of International Economics, 2012, vol. 87, issue 2, 262-276

Abstract: In a North–South vertically differentiated duopoly we analyze (i) the effects of parallel import (PI) policies on price competition and (ii) the interdependence of national PI policies. Prices can be higher in the North if both countries permit PIs relative to when only the South does. If governments maximize national welfare and demand asymmetry across countries is sufficiently large, the North forbids PIs to ensure its firm sells in the South and international price discrimination — the South's most preferred market outcome — obtains. When demand structures are relatively similar across countries, the North permits PIs and uniform pricing — its most preferred outcome — results.

Keywords: Parallel imports; Oligopoly; Quality; Product differentiation; Market structure; Welfare (search for similar items in EconPapers)
JEL-codes: F10 F13 F15 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

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Related works:
Chapter: Equilibrium parallel import policies and international market structure (2023)
Working Paper: Equilibrium Parallel Import Policies and International Market Structure (2011)
Working Paper: Equilibrium parallel import policies and international market structure (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:inecon:v:87:y:2012:i:2:p:262-276

DOI: 10.1016/j.jinteco.2012.01.007

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