Endogenous Lobbying and Protection under Monopolistic Competition

Jaiho Chung

Global Economic Review, 2011, vol. 40, issue 3, 315-322

Abstract: This paper studies the “Protection for Sale” model in the setting of monopolistic competition drawing on the quadratic sub-utility model. This model generates two new findings: (1) the average cross-price elasticity, in particular, only among foreign varieties in a sector negatively influences the level of protection; (2) the total number of domestic varieties over one of the foreign varieties in a sector, a new proxy for political power of domestic lobby groups in that sector, positively influences the level of protection.

Date: 2011
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DOI: 10.1080/1226508X.2011.601640

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