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Title: Horizontal regulatory protection: its appeal and implications in a linear Cournot duopoly
Authors: Edwards, T. Huw
Keywords: Duopoly
Trade
Protection
Issue Date: 2007
Abstract: I set up a linear model of a cross-hauling, Cournot duopoly. Even where countries are small, there exists a motive for protection to achieve a profit-shift and to raise revenue. Where the protection is of tariff form, then the protection will only totally exclude the foreign firm for a limited set of parameter values. By contrast, where the protection takes the form of a horizontal technical barrier to trade (HTBT), the government will always exclude the foreign firm. Where there is no constraint on imposing tariffs, these will always be preferred to the HTBT. However, if tariff reductions are imposed by international agreement without simultaneous restrictions on HTBTs, then reductions below a threshold level will trigger imposition of an HTBT sufficient to totally exclude the foreign firm.
Description: This is a working paper. It is also available at: http://ideas.repec.org/p/lbo/lbowps/2007_05.html.
URI: https://dspace.lboro.ac.uk/2134/2743
ISSN: 1750-4171
Appears in Collections:Working Papers (Economics)

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