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SAVING DOLPHINS: BOYCOTTS, TRADE SANCTIONS, AND UNOBSERVABLE TECHNOLOGY *
Author(s) -
Miyagiwa Kaz
Publication year - 2009
Publication title -
international economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.658
H-Index - 86
eISSN - 1468-2354
pISSN - 0020-6598
DOI - 10.1111/j.1468-2354.2009.00552.x
Subject(s) - boycott , unobservable , sanctions , unintended consequences , economics , international economics , international trade , business , politics , law , political science , econometrics
Consumers boycott some goods because they do not approve the ways they are manufactured. I examine the efficacy of boycotts and the role of trade policy in influencing the foreign exporter's technology choice. Even when its technology choice is unobservable, boycott threats can prompt the foreign firm to adopt the technology consumers prefer. Import policy can augment this effect, but when boycotts can have a substantial impact on demand, a use of ad valorem tariffs yields the unintended result. Specific tariffs and quotas are free of this defect, but specific tariffs are more effective than quotas in addressing consumers' concern.