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Content Requirements with Bilateral Monopoly

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  • Beghin, John C.
  • Sumner, Daniel A.

Abstract

This 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 dead-weight lossbut 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.

Suggested Citation

  • Beghin, John C. & Sumner, Daniel A., 1990. "Content Requirements with Bilateral Monopoly," Department of Economics and Business - Archive 259453, North Carolina State University, Department of Economics.
    • Handle: RePEc:ags:ncbuar:259453
    DOI: 10.22004/ag.econ.259453
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    File URL: https://ageconsearch.umn.edu/record/259453/files/magr-northcarolinastate-036.pdf
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    References listed on IDEAS

    as
    1. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, December.
    2. Michael L. Mussa, 1984. "The Economics of Content Protection," NBER Working Papers 1457, National Bureau of Economic Research, Inc.
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    5. Beghin, John C. & Karp, Larry S., 1991. "Estimation of price policies in Senegal An empirical test of cooperative game theory," Journal of Development Economics, Elsevier, vol. 35(1), pages 49-67, January.
    6. Ronald Findlay & Stanislaw Wellisz, 1986. "Tariffs, quotas and domestic-content protection: some political economy considerations," Public Choice, Springer, vol. 50(1), pages 221-242, January.
    7. Brown, James N & Ashenfelter, Orley, 1986. "Testing the Efficiency of Employment Contracts," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages 40-87, June.
    8. Anderson, James E., 1987. "Quotas as options: Optimality and quota license pricing under uncertainty," Journal of International Economics, Elsevier, vol. 23(1-2), pages 21-39, August.
    9. Hollander, Abraham, 1987. "Content protection and transnational monopoly," Journal of International Economics, Elsevier, vol. 23(3-4), pages 283-297, November.
    10. 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.
    11. Thomson, William, 1987. "Monotonicity of bargaining solutions with respect to the disagreement point," Journal of Economic Theory, Elsevier, vol. 42(1), pages 50-58, June.
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    Cited by:

    1. Beghin, John C & Lovell, C A Knox, 1993. "Trade and Efficiency Effects of Domestic Content Protection: The Australian Tobacco and Cigarette Industries," The Review of Economics and Statistics, MIT Press, vol. 75(4), pages 623-631, November.
    2. Beghin, John C. & Sumner, Daniel A., 1991. "A Game-Theoretic Analysis Of The Australian ~ Tobacco Domestic Content Policy," 1991 Annual Meeting, August 4-7, Manhattan, Kansas 271257, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. Beghin, John & Knox Lovell, C.A., 1991. "Testing Trade and Efficiency Effects of Domestic Content in the Australian Tobacco and Cigarette Industries," WAEA/ WFEA Conference Archive (1929-1995) 321436, Western Agricultural Economics Association.

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