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The Liberalization Of Tariff Rate Quotas Under Oligopolistic Competition

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  • Scoppola, Margherita

Abstract

The paper develops a two-stage capacity constrained model, in which the mode of competition is endogenous and the constraint is flexible, to investigate the impact of Tariff Rate Quotas (TRQs) and of different liberalization options in oligopolistic markets. The model predicts that the equilibrium moves from a pure Bertrand outcome to a Cournot outcome as the effectiveness of the capacity constraint increase, that is, as the gap between the cost of the licences plus the in-quota tariff and the out-of-quota tariff increases. The results show that the impacts of the various liberalization options - the expansion of quotas by means of an increase in the number of operators or in the quota allocated to incumbents, the reduction in the in-quota and out-of-quota tariffs and improvements in the TRQ administration system - are rather diverse from those predicted by models assuming perfect competition.

Suggested Citation

  • Scoppola, Margherita, 2008. "The Liberalization Of Tariff Rate Quotas Under Oligopolistic Competition," 109th Seminar, November 20-21, 2008, Viterbo, Italy 44822, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaa109:44822
    DOI: 10.22004/ag.econ.44822
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    References listed on IDEAS

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    1. Maria Priscila Ramos & Jean-Christophe Bureau & Luca Salvatici, 2010. "Trade composition effects of the EU tariff structure: beef imports from Mercosur," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 37(1), pages 1-26, March.
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    8. James I. Rude & Jean‐Philippe Gervais, 2006. "Tariff‐Rate Quota Liberalization: The Case of World Price Uncertainty and Supply Management," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 54(1), pages 33-54, March.
    9. David M. Kreps & Jose A. Scheinkman, 1983. "Quantity Precommitment and Bertrand Competition Yield Cournot Outcomes," Bell Journal of Economics, The RAND Corporation, vol. 14(2), pages 326-337, Autumn.
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    Cited by:

    1. Abbassi, Abdessalem & Tamini, Lota D. & Dakhlaoui, Ahlem, 2015. "Import quota allocation between regions under Cournot competition," Economic Modelling, Elsevier, vol. 51(C), pages 484-490.
    2. Anania, Giovanni, 2010. "EU Economic Partnership Agreements and WTO negotiations. A quantitative assessment of trade preference granting and erosion in the banana market," Food Policy, Elsevier, vol. 35(2), pages 140-153, April.

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    More about this item

    Keywords

    Agricultural and Food Policy; Industrial Organization; International Relations/Trade;
    All these keywords.

    JEL classification:

    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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