On the Equivalence of Tariffs and Quotas under a Revenue Constraint

This paper sets out a duopolistic model to examine the price and welfare equivalence of tariffs and quotas, given the quota rent is equal to the tariff revenue. It shows that the domestic welfare ranking of the two trade policies crucially depends on the relative costs of the domestic and foreign firms; when the domestic firm's relative costs are lower than those of the foreign firm, a quota regime generally leads to a higher welfare level than that of an equivalent tariff regime. This finding contrasts sharply with the conclusions of Dasgupta and Stiglitz (1977 ), where it was found that a tariff regime always generates higher domestic welfare.     

Uncertainty and Production Quotas

This paper examines the role of uncertainty in determining the impact of production quotas on a risk-neutral producer's behaviour
In the context of production uncertainty the introduction of a quota will lead to a reduction in planned production. Moreover, in a situation of an established quota, the level of planned production relative to the quota depends both on the size of the profit margin on quota production and on the extent of production uncertainty. Apart from these direct influences, uncertainty influences planned production indirectly in a situation where over-quota production can be sold in an uncertain export market. The direction of this influence depends on the relationship between the producer's uncertainties of price and production. It is argued, therefore, that the welfare assessment of the impact of production quotas must incorporate the role of uncertainty.     

Quotas and the second best

This note makes two observations about trade restrictions on subgroups of commodities. First, unlike tariffs, unalterable quotas provide no second-best justification for general restrictions. Second, the optimal allocation of intra-subgroup trade depends on the form of restraint imposed.     

Import Quotas and Entry Deterrence

Using a simple version of the Milgrom and Roberts entry deterrence model, it is shown that adjusting a quota so that a greater volume of imports is allowed, can facilitate entry into the domestic industry. That is, the easing of a quota, can cause the domestic incumbent to shift from deterring entry to accommodating entry.     

Simultaneous Reform of Tariffs and Quotas

This paper presents a general result for simultaneous reform of tariffs and quotas in a small open economy, where some of the quota rents do not accrue to domestic residents. Absent highly perverse income effects, welfare must rise following a uniform proportionate reduction in tariffs and a uniform proportionate relaxation of quotas, weighted by their rent‐retention parameters. Previous results are shown to be special cases of this one, and its implications for practical policy advice and its relationship with the policy of “tariffication” of quotas are discussed.     

Market Share Quotas and Community Reinvestment

This notes explores some theoretical implications of the U.S. Department of Justice's policy requiring lenders to seek as much market share in protected neighborhoods as elsewhere. In the asymmetric Cournot case, the high-cost lender in the protected neighborhood responds in the expected way, but the low-cost lender's response depends on the curvature of the demand function. For concave demand, the low-cost lender's output decisions run counter to those of the high-cost lender, undermining the policy's effectiveness and inefficiently shifting production in the protected market from the low-cost provider to the high-cost provider.     

Volume Quotas with Heterogeneous Product Categories*

Volume quotas on imports are an important part of assistance packages afforded a number of major industries in Australia. Generally, quota is allocated to importers free of charge, although recently a proportion of quota for some product groups has been sold by tender. In this paper we compare the effects of volume quotas applied to heterogeneous product groups when allocated free of charge, by full tender sale and by a combination offender sale and free allocation. The analysis is undertaken for both competitive markets and in the case where importers have some market power.     

Incentives to Form Customs Unions and Quotas

This paper extends the well known Kemp–Wang proposition regarding customs unions and tariffs to the case of import quotas. It is shown that a customs union in the presence of import quotas will leave each country, whether a member of the customs union or not, not worse off than before the formation of the customs union. The partial-equilibrium approach is used in this study.     

Quotas and the structure of consumer demand

In the direct utility function, quantities axe exogenous, while prices and total expenditure are endogenous. Consequently, this utility function is appropriate for analyzing the impact on prices and total expenditure from an exogenous change in the quantity of a commodity. Such an exogenous change in quantity could occur when quotas change. The direct translog utility function is estimated for a four commodity breakdown of U.S. expenditure. Estimates of quantity elasticities of price and expenditure indicate that domestically produced non-durables are necessities. As a result, the imposition of quotas on these goods will be particularly deleterious to lower income consumers.     

Enforcing Domestic Quality Dominance through Quotas*

We study duopoly competition between a domestic and a foreign firm who first choose their quality and then compete in prices in the domestic market. As is well known, the free‐trade equilibrium exhibits quality differentiation and indeterminacy of the quality leader. We show that an import quota can enforce, as the unique subgame‐perfect equilibrium outcome, the quality ranking that favors the domestic producer and thereby can increase domestic welfare.     

海洋渔业过度捕捞与私人可转让配额

海洋鱼类及其捕捞量的产权是不明确的,管理不善必然产生过度捕捞.过度捕捞包括生物性过度捕捞和经济性过度捕捞.传统的可捕捞总量和捕捞力度管制不能根本解决过度捕捞问题.私人可转让配额制确立了渔民关于可捕捞量的私人财产权,对解决过度捕捞问题非常有效.我国应当研究和借鉴其他国家关于可捕捞总量管制和私人可转让配额制的宝贵经验.     

Smuggling and Bhagwati's Nonequivalence Between Tariffs and Quotas

The authors extend Professor Bhagwati's analysis about the nonequivalence between trade policy instruments when domestic production is monopolized and the terms of trade are endogenous, by allowing for smuggling. They show that the dominance of the ad valorem tariff over the quota is not robust. Tariffication can lower welfare even when the level of illegal imports is quite small. However, tariffication with a specific tariff is always beneficial because the specific tariff dominates the ad valorem tariff and the quota with or without smuggling. Smuggling (or the threat) also tends to lower the second–best tariff/quota, and increases welfare when imports are restricted by a quota, but lowers it under a tariff.     

Optimal Quotas, Price Competition And Products'' Attributes

We characterize the Nash equilibrium in the Hotelling model in the presence of an import quota. The optimal quota is identified and shown to be invariant to the mode of competition. We also prove that in the presence of a quota maximal differentiation is not achieved at equilibrium.     

Technological Upgrading under Tariffs and Equivalent Quotas*

This paper compares the effect of tariffs and that of equivalent quotas on the domestic firm’s production technology choice when it competes with a foreign firm in the domestic market. It is shown that under Bertrand price competition, the ranking of technology under tariff protection and quota protection is ambiguous, as it depends on the relative strength of the strategic vs output effects. The equivalent quota regime can generate a higher‐technology (implying a lower production cost) choice than the tariff regime if the strategic effect dominates the output effect. In contrast, the technology level is necessarily higher under the tariff regime than under the equivalent quota regime when the firms engage in Cournot quantity competition.     

公共项目循环经济指标及评价

根据资源、能源型公共项目的循环经济特征,构建包括环境、资源与能源、社会经济,以及协调关系的循环经济评价指标体系,并提出模糊综合评价方法的分析过程。     

The Nonequivalence of Import and Export Quotas in Strategic Equilibrium

The authors use a standard general‐equilibrium trade model to show that export and import policies are not symmetric in the equilibrium of a strategic game with quotas. It is assumed that N (identical) large countries, without cooperation, set their import (or export) quotas to maximize domestic welfare. It is shown that the equilibrium in which all countries use import quotas differs from, and is superior to, the equilibrium in which countries use export quotas. The difference arises because the elasticity of the residual foreign export supply schedule differs between the two equilibria. The authors also study the properties of the sequential equilibrium of the game. In a simultaneous‐move game, each country is indifferent as to whether it uses an import or export quota, given the policy of the other country. However, in a sequential‐move game, the first mover will prefer to use an import quota rather than an export quota.     

Quotas and equilibrium relative prices in the trade restricting country

This paper is concerned with the effects of international trade restriction through quotas. It is shown that a casual relationship exists between the fraction of licences distributed domestically, the terms of trade, and the domestic relative price of the importable.     

The Effect of Quotas on Domestic Product Price and Quality

A quota on foreign competition generally leads to quality upgrading (downgrading) of the low-quality (high-quality) firm, an increase in average quality, a reduction of quality differentiation, and a reduction of domestic consumer surplus, irrespective of whether the foreign firm produces higher or lower quality. Effects of a quota on industry profits and domestic welfare depend on the direction of international vertical differentiation. If the foreign firm produces low quality, both firms prices and profits rise but domestic welfare falls. This describes well some major effects of a Japanese Voluntary Export Restraint (VER) in the U.S. auto market and relevant empirical findings. If the foreign firm produces high quality, foreign profits will fall. Since domestic consumer surplus falls only unsubstantially, domestic profit gains lead to an increase of domestic welfare.I am grateful to Jim Gaisford, and Konrad Stahl, seminar participants at the Universität Mannheim and at the ZEW, and an anonymous referee for useful comments and suggestions. As Senior Fellow at the Center for European Integration Studies (ZEI), Bonn, I gratefully acknowledge its continued support.     

A Note on Auction Quotas with a Foreign Duopoly*

A country importing a good from foreign duopolists may improve its welfare by imposing a quota on the good at the free trade quantity and giving a fraction of the quota licences to the duopolists while auctioning off the rest.