Game of Tariffs: the Impact of Market Concentration on International Trade

• Autorzy: Sławomir Kalinowski
• Języki publikacji: EN

Abstrakty

EN

The article investigates the impact of the concentration, measured by the number of firms in the exporting industry, on the tariffs and welfare generated by international exchange. The research was conducted in two dimensions. First, the model of bilateral trade exchange between two economies was tested in terms of a non-cooperative game. Nash equilibria point to the tariff rates which negatively depend on the number of firms in the exporting industry. The welfare grows with increasing competition, but its marginal value diminishes. The second perspective was the application of the Kalai-Smorodinsky bargaining solution in order to indicate the outcome of a cooperative version of the game. The cooperative solution was always a zero tariff option for symmetric market structures. If there is a more competitive exporting industry in one country, it should negotiate a tariff higher than zero, whilst a country with less competitive exporters should agree upon a zero tariff. Such an outcome of negotiations is hard to achieve from a political point of view. (original abstract)

Słowa kluczowe

EN

International trade; Negotiations; Tariffs

PL

Handel międzynarodowy; Negocjacje; Cła

• Czasopismo: Journal of International Studies
• Rocznik: 2020
• Tom: 13
• Numer: nr 4
• Strony: 248--258

Twórcy

autor

Sławomir Kalinowski

• Poznań University of Economics and Business

Bibliografia

• Bhagwati, J. (1965). On the equivalence of tariffs and quotas. Trade, growth and the balance of payments, 53-67.
• Boulding, K. E. (1945). The concept of economic surplus. The American Economic Review, 35(5), 851-869.
• Copeland, B. R. (1990). Strategic interaction among nations: negotiable and non-negotiable trade barriers. Сanadian Journal of Economics, 84-108.
• Dixit, A., & Norman, V. (1980). Theory of international trade: A dual, general equilibrium approach. Cambridge University Press.
• Ederington, J. (2003). Policy linkage and uncertainty in international agreements. Economic Inquiry, 41(2), 305-317.
• Ethier, W. J. (1982). National and international returns to scale in the modern theory of international trade. The American Economic Review, 72(3), 389-405.
• Harrison, G. W., & Rutström, E. E. (1991). Trade wars, trade negotiations and applied game theory. The Economic Journal, 101(406), 420-435.
• Kalai, E., & Smorodinsky, M. (1975). Other solutions to Nash's bargaining problem. Econometrica: Journal of the Econometric Society, 513-518.
• Krishna, K. (1984). 985. Trade Restrictions as Facilitating Practices.". Harvard Institute of Economic Research, 251-70.
• Krugman, P. R. (1979). Increasing returns, monopolistic competition, and international trade. Journal of international Economics, 9(4), 469-479.
• Nash Jr, J. F. (1950). The bargaining problem. Econometrica: Journal of the econometric society, 155-162.
• Nash, J.F. (1953). Two-Person Cooperative Games. Econometrica, 21, 128-140.
• Nash, J. (1951). Non-cooperative games. Annals of mathematics, 286-295.
• Shubik, M. (1991). A Game-theoretic Approach to Political Economy, fourth printing.
• Straffin, P. D. (1993). Game Theory and Strategy, Math. Association of America, Washington, DC.
• Zhang, J., L. Xue, L. Zu (2013). Farsighted free trade networks, International Journal of Game Theory, 42, 375-398.
• Zotti, J., & Lucke, B. (2014). Welfare-optimal trade and competition policies in small open oligopolistic economies. The Journal of International Trade & Economic Development, 23(3), 402-423.

Identyfikatory

DOI

10.14254/2071-8330.2020/13-4/17