TARIFF POLICY AND WELFARE IN AN INTERNATIONAL DUOPOLY WITH CONSUMER‐FRIENDLY INITIATIVE |
| |
Authors: | Leonard F S Wang Ya‐Chin Wang Lihong Zhao |
| |
Institution: | 1. Department of Applied Economics, National University of Kaohsiung, Kaohsiung 811, Taiwan, R.O.C.;2. Department of Finance and Banking, Kun Shan University, Tainan Hsien 71003, Taiwan, R.O.C.;3. China HuanQiu Contracting & Engineering Corporation, Beijing 100029, China |
| |
Abstract: | The purpose of this paper is to explore how strategic tariff policy and welfare are affected by the consumer‐friendly initiative of foreign exporting firms. We define a firm that is consumer‐friendly or non‐profit‐based if it considers both its own profit and consumer surplus. This paper extends Brander and Spencer by taking the consideration of consumer‐friendly firms into an international duopoly, and within such context examining the tariff policy and welfare. The consumer‐friendly initiative that leads to trade liberalization is a ‘Win‐Win‐Win’ solution in the sense that it is not only beneficial for foreign exporting firms, but also for the government and consumers of the importing country. |
| |
Keywords: | consumer‐friendly initiative import tariff trade liberalization D43 L13 L33 |
|
|