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Domestic Content Requirements with Bilateral Monopoly

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  • Beghin, John C
  • Sumner, Daniel A

Abstract

This short paper models physical content policies in a bilateral monopoly setting using a cooperative game approach. For just binding or nonbinding content requirements, the policy does not induce any deadweight loss but alters the profit distribution in favor of the domestic supplier. This result holds as long as the inputs concerned by the policy are good substitutes in production, and when the disagreement point corresponds to low content requirements and low marginal cost for the domestic input. Copyright 1992 by Royal Economic Society.

Suggested Citation

  • Beghin, John C & Sumner, Daniel A, 1992. "Domestic Content Requirements with Bilateral Monopoly," Oxford Economic Papers, Oxford University Press, vol. 44(2), pages 306-316, April.
    • Handle: RePEc:oup:oxecpp:v:44:y:1992:i:2:p:306-16
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    Cited by:

    1. Jie-A-Joen, C. & Belderbos, R.A. & Sleuwaegen, L., 1998. "Local content requirements, vertical cooperation, and foreign direct investment," Research Memorandum 001, Maastricht University, Netherlands Institute of Business Organization and Strategy Research (NIBOR).
    2. Anni Huhtala & Eva Samakovlis, 2002. "Does International Harmonization of Environmental Policy Instruments Make Economic Sense?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 21(3), pages 259-284, March.
    3. repec:ebl:ecbull:v:6:y:2004:i:24:p:1-9 is not listed on IDEAS
    4. Beghin, John C. & Blake Brown, A. & Hasyim Zaini, M., 1997. "Impact of domestic content requirement on the US tobacco and cigarette industries," Agricultural Economics, Blackwell, vol. 15(3), pages 201-212, January.
    5. Bekkali, Mukhtar & Beghin, John C., 2005. "Economics of Domestic Cultural Content Protection in Broadcasting, The," Staff General Research Papers Archive 12476, Iowa State University, Department of Economics.

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