Tariffs Versus Ratio Quotas Under Duopoly
Journal
Journal of International Economics
Journal Volume
27
Journal Issue
1-2
Pages
177-183
Date Issued
1989-09
Date
1989-09
Author(s)
Mai, Chao-Cheng
Abstract
This paper presents a conjectural variations model of a duopoly to investigate the question of the equivalence of tariffs and ratio quotas. It is shown that whether or not tariffs and ratio quotas are equivalent is crucially dependent upon (i) the particular value of the conjectural variations parameter and (ii) the target ratio of imports to domestic production in question. Therefore, the monopolistic behavior of the domestic firm over consumers does not necessarily result in non-equivalence. This paper also demonstrates that the price under a ratio quota is always higher than that under a volume quota. © 1989.
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journal article
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