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The structure of Nash equilibrium tariffs

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  • Yoshitomo Ogawa

Abstract

This paper examines theoretically the structure of optimal (Nash equilibrium) tariff rates in a two-country economy with more than two traded goods. We provide a condition under which the equilibrium tariff rates are uniform in both countries, and explore the relative size of the equilibrium tariff rates in each country when the uniform tariff condition is not satisfied. The elasticities of compensated excess demand for goods play an important role in characterizing the structure of the equilibrium tariff rates. This paper undertakes the analysis using a dual approach. Copyright Springer-Verlag 2012

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  • Yoshitomo Ogawa, 2012. "The structure of Nash equilibrium tariffs," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 51(1), pages 139-161, September.
    • Handle: RePEc:spr:joecth:v:51:y:2012:i:1:p:139-161
    DOI: 10.1007/s00199-010-0599-x
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    More about this item

    Keywords

    Nash equilibrium tariff; Uniformity; Own-price elasticity; Cross-elasticity; F11; F13;
    All these keywords.

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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