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On the Equivalence of Content Protection Scheme and X-equivalent Tariff

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  • Joysri Acharyya

Abstract

This article examines the welfare equivalence of alternative modes of protection for the domestic input producers in duopolistic environment when tariffication is adopted in the input tier. We use the definition of equivalence introduced by Vousden (1987). In contrast to Vousden (1987), we find that when the final good producers have Cournot conjectures, a content protection scheme (CPS) may be more efficient in respect of both protection and social welfare compared to the X-equivalent tariff or not depending on the value of the parameters.

Suggested Citation

  • Joysri Acharyya, 2016. "On the Equivalence of Content Protection Scheme and X-equivalent Tariff," Foreign Trade Review, , vol. 51(1), pages 1-12, February.
    • Handle: RePEc:sae:fortra:v:51:y:2016:i:1:p:1-12
    DOI: 10.1177/0015732515614435
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    References listed on IDEAS

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    1. Brander, James A. & Spencer, Barbara J., 1984. "Trade warfare: Tariffs and cartels," Journal of International Economics, Elsevier, vol. 16(3-4), pages 227-242, May.
    2. Vousden, Neil, 1987. "Content protection and tariffs under monopoly and competition," Journal of International Economics, Elsevier, vol. 23(3-4), pages 263-282, November.
    3. Jones, Ronald W., 1987. "Trade taxes and subsidies with imperfect competition," Economics Letters, Elsevier, vol. 23(4), pages 375-379.
    4. Gene M. Grossman, 1981. "The Theory of Domestic Content Protection and Content Preference," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 96(4), pages 583-603.
    5. Kowalczyk, Carsten & Skeath, Susan E., 1994. "Pareto ranking optimal tariffs under foreign monopoly," Economics Letters, Elsevier, vol. 45(3), pages 355-359.
    6. Hwang, Hong & Mai, Chao-cheng, 1988. "On the equivalence of tariffs and quotas under duopoly : A conjectural variation approach," Journal of International Economics, Elsevier, vol. 24(3-4), pages 373-380, May.
    7. Brander, James A. & Spencer, Barbara J., 1985. "Export subsidies and international market share rivalry," Journal of International Economics, Elsevier, vol. 18(1-2), pages 83-100, February.
    8. Kala Krishna & Motoshige Itoh, 1988. "Content Protection and Oligopolistic Interactions," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 55(1), pages 107-125.
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    More about this item

    Keywords

    Protection; CPS; Cournot conjecture; Tariff; X-equivalent tariff;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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