Optimal Policies with Strategic Distortions

Kala Krishna () and Marie Thursby

No 2527, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Recent work in optimal trade policy for imperfectly competitive markets usually identifies the optimal level of an instrument, and when more instruments are allowed, general interpretations have been unavailable, This paper analyzes the jointly optimal levels of a Variety of instruments with oligopolistic competition. A targeting principle for identifying optimal policies is derived using the concept of a "strategic distortion." It is shown how optimal policies vary with the distortions present and the number of firms, as well as assumptions about market segmentation and regulation. The principles of targeting are illustrated using agricultural marketing boards.

Date: 1988-03
Note: ITI IFM
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Citations: View citations in EconPapers (6)

Published as Journal of International Economics Volume 31, 1991, pp. 291-308

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Journal Article: Optimal policies with strategic distortions (1991)
Working Paper: Optimal Polocies with Strategic Distortions (1991)
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