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Some aspects on regional integration, comparative advantage and consumer's diversity

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  • Takaaki Aoki

Abstract

This article describes one simple Cournot oligopoly model with linear inverse demand and international linkage, and tries to analyse how the degree of competitiveness, the diversity in comparative advantage, consumer preference and market volume are closely interrelated with each other in the course of free trade areas (FTA) liberalization. The influence of income/substitution effects to firm's profit maximization is also examined. My analysis shows some basic results and implications regarding the tariff-setting strategies and the incentive for endogenous internal liberalization, as well as the role of FTA formation on a stream to world-wide liberalization.

Suggested Citation

  • Takaaki Aoki, 2008. "Some aspects on regional integration, comparative advantage and consumer's diversity," Applied Economics, Taylor & Francis Journals, vol. 40(18), pages 2361-2368.
    • Handle: RePEc:taf:applec:v:40:y:2008:i:18:p:2361-2368
    DOI: 10.1080/00036840600970120
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    References listed on IDEAS

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    1. Pravin Krishna, 1998. "Regionalism and Multilateralism: A Political Economy Approach," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(1), pages 227-251.
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    4. Freund, Caroline, 2000. "Multilateralism and the endogenous formation of preferential trade agreements," Journal of International Economics, Elsevier, vol. 52(2), pages 359-376, December.
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