The importance of fixed costs in the design of trade policies: An exercise in the theory of second best

Luis Corchon and Miguel González-Maestre

Working Papers. Serie AD from Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie)

Abstract: In this paper we study the optimal trade policy in an oligopolistic market with a given number of quantity-setter firms. It is shown that under no fixed costs, the optimal trade policy displays certain characteristics but under fixed costs most of these characteristics no Longer hold.

Keywords: Optimal trade policy; tariffs; quotas (search for similar items in EconPapers)
Pages: 36 pages
Date: 1994-09
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http://www.ivie.es/downloads/docs/wpasad/wpasad-1994-16.pdf Fisrt version / Primera version, 1994 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:ivi:wpasad:1994-16

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