International duopoly with tariffs
Eric Fisher () and
Charles A. Wilson
No 308, International Finance Discussion Papers from Board of Governors of the Federal Reserve System (U.S.)
This paper analyzes the effects of a tariff on price-setting duopolists who cannot segment geographically distinct markets; hence, commercial policy has effects in domestic and foreign markets. Although each firm's payoff function is discontinuous, there is a unique equilibrium for an arbitrary tariff. We find that a tariff serves to increase the profits of both the domestic and foreign producer. Moreover, the profits of both firms rise monotonically with the tariff.
Keywords: Tariff; International trade (search for similar items in EconPapers)
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Working Paper: International Duopoly with Tariffs (1987)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgif:308
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