TRADE POLICY AND TIME CONSISTENCY IN AN OLIGOPSONISTIC WORLD MARKET
| dc.creator | Gervais, Jean-Philippe | |
| dc.creator | Lapan, Harvey E. | |
| dc.date | 2017-04-01T15:28:59Z | |
| dc.date.accessioned | 2026-07-09T03:23:37Z | |
| dc.description | This paper investigates the strategic behavior between countries that have purchasing power on the world market for a certain good. Tariffs and quotas are not equivalent protection instruments in this oligopsonistic market. Policy active importers would be better off by colluding and setting their trade instrument cooperatively. In a non-cooperative setting, if production decisions occur before consumption decisions, the ex-ante optimal policy is not time consistent because the ex-post elasticity of the residual foreign export supply curve is lower than the ex-ante elasticity. However, we show that the importers' inability to irrevocably commit to their trade instrument may be welfare superior to the precommitment solution. The negative welfare implication of non-cooperative behavior may be balanced off by the welfare effect of the ex-port elasticity. A numerical example is proposed to provide insights on the theoretical results. | |
| dc.identifier | doi:10.22004/ag.econ.18239 | |
| dc.identifier | https://ageconsearch.umn.edu/record/18239/files/isu310.pdf | |
| dc.identifier | http://ageconsearch.umn.edu/record/18239 | |
| dc.identifier.uri | http://hdl.handle.net/123456789/531772 | |
| dc.language | eng | |
| dc.publisher | ||
| dc.source | http://ageconsearch.umn.edu/record/18239 | |
| dc.title | TRADE POLICY AND TIME CONSISTENCY IN AN OLIGOPSONISTIC WORLD MARKET | |
| dc.type | Text |