An Elementary Proposition Concerning Parallel Imports

Martin Richardson

Chapter 14 in Dimensions of Trade Policy, 2017, pp 285-299 from World Scientific Publishing Co. Pte. Ltd.

Abstract: This paper demonstrates that, when countries individually choose whether or not to prohibit parallel imports, a global Nash equilibrium involves the permitting of parallel importing into all relevant foreign markets i.e. global uniform pricing. This result is sensitive in a straightforward way to the tariff-setting powers of countries and to the specification of a government’s objective function (i.e. political economy considerations). We also show that when countries can prevent “parallel exports” then any Nash equilibrium involves global price discrimination.

Keywords: Trade Policy; Preferential Trading Agreements; Content Protection; Parallel Imports (search for similar items in EconPapers)
JEL-codes: F13 (search for similar items in EconPapers)
Date: 2017
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Journal Article: An elementary proposition concerning parallel imports (2002)
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