Price competition between two international firms facing tariffs

Eric O N Fisher, Charles A. Wilson

    Research output: Contribution to journalArticle

    Abstract

    This paper examines the effects of tariffs on price-setting duopolists selling a homogeneous product. The producers cannot segment geographically distinct markets. It provides a complete characterization of the equilibrium (mixed) strategies and analyzes the pattern of competition for different tariffs. If a country raises its tariff, the profits of both producers increase, although the protected firm typically benefits more than its foreign counterpart. Growth in one market may reduce the profits of the firm located in the other market.

    Original languageEnglish (US)
    Pages (from-to)67-87
    Number of pages21
    JournalInternational Journal of Industrial Organization
    Volume13
    Issue number1
    DOIs
    StatePublished - 1995

    Fingerprint

    Profitability
    Sales
    Tariffs
    Price competition
    Profit
    Price setting
    Mixed strategy equilibrium

    Keywords

    • Anti-dumping
    • Commercial policy
    • Imperfect competition

    ASJC Scopus subject areas

    • Strategy and Management
    • Industrial relations
    • Aerospace Engineering
    • Industrial and Manufacturing Engineering

    Cite this

    Price competition between two international firms facing tariffs. / Fisher, Eric O N; Wilson, Charles A.

    In: International Journal of Industrial Organization, Vol. 13, No. 1, 1995, p. 67-87.

    Research output: Contribution to journalArticle

    Fisher, Eric O N ; Wilson, Charles A. / Price competition between two international firms facing tariffs. In: International Journal of Industrial Organization. 1995 ; Vol. 13, No. 1. pp. 67-87.
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