Uniform versus discriminatory tariffs in increasing marginal costs and endogenous competition

Kangsik Choi

The Journal of International Trade & Economic Development, 2024, vol. 33, issue 5, 928-955

Abstract: By allowing exporters to produce under asymmetric increasing marginal costs, we investigate the impact of tariff discrimination when considering exporters' endogenous choice of competition mode. When considering endogenous competition mode, discriminatory tariffs lead to Cournot competition, whereas uniform tariffs lead to diverse modes of competition. The discriminatory (uniform) tariffs can obtain Pareto superiority from the perspective of consumers surplus, social and global welfare if product differentiation is either high or low (intermediate). Contrast to previous results, since the importing country tends to impose a lower (higher) tariff on the efficient (inefficient) exporter, the inefficient exporter always prefers the uniform tariffs while the efficient exporter's preference for tariff regime varies for any degree of product differentiation. Thus, with increasing marginal costs for any degree of product differentiation, there is a possibility that the preferences for tariff regimes change in the same direction for the exporters' profits, consumers surplus, social and global welfare.

Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/09638199.2023.2226260 (text/html)
Access to full text is restricted to subscribers.

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:taf:jitecd:v:33:y:2024:i:5:p:928-955

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RJTE20

DOI: 10.1080/09638199.2023.2226260

Access Statistics for this article

The Journal of International Trade & Economic Development is currently edited by Pasquale Sgro, David E.A. Giles and Charles van Marrewijk

More articles in The Journal of International Trade & Economic Development from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().