DOMINANT STRATEGIC TRADE POLICY | Zendy

Valentin Melnik | Zendy

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DOMINANT STRATEGIC TRADE POLICY

Author(s) -

Valentin Melnik

Publication year - 2021

Publication title -

environment technology resources proceedings of the international scientific and practical conference

Language(s) - English

Resource type - Journals

eISSN - 2256-070X

pISSN - 1691-5402

DOI - 10.17770/etr2021vol2.6542

Subject(s) - cournot competition , subsidy , tariff , duopoly , commercial policy , license , economics , international economics , unit (ring theory) , government (linguistics) , international trade , microeconomics , business , market economy , computer science , linguistics , philosophy , mathematics education , mathematics , operating system

In implementing trade policy measures, governments usually select from a range of instruments including quotas, subsidies (explicit or implicit) and tariffs. In this paper we consider the potential gain of a government pursuing a two-part trade policy: an import license for entry, along with a per-unit tariff on imports. The model is a three-step game between home and foreign countries in the Cournot duopoly. The paper demonstrates that two-part trade policy is dominant.

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