Market Integration and Competition in Environmental and Trade Policies

Recent empirics suggest the relevance of transport cost reductions for world trade growth along with eliminations in protectionist trade barriers. To address the welfare effects of trade cost reductions in a context of `trade and the environment,' we develop a two-stage game model where governments choose environmental and trade policies and rms play a Cournot-Nash game. We show that reductions in transport costs lead to lower emission taxes and higher tariffs. And, we nd that the degree of pollution damage plays a central role in whether market integration is welfare-improving relative to autarky.market integration, oligopoly, pollution tax, tariff, gains/losses from trade

TARIFFS AND TRADE LIBERALIZATION WITH NETWORK EXTERNALITIES

This paper constructs a reciprocal market model of intra-industry trade in network goods to consider the implications of network externalities for an optimal tari policy and the welfare eects of bilateral tari reductions. We show that the degree of network externalities nontrivially aects the sign of the Nash equilibrium tari. Then, we prove that network externalities amplify the gains from tari reductions. These results help better understand the implications of traderelated issues in network industries.

When Are Voluntary Export Restraints Voluntary? : A Differential Game Approach

We revisit voluntariness of voluntary export restraints (VERs) in a differential game model of duopoly with sticky prices. We show that a VER set at the free trade level has no effect on equilibrium under open-loop strategies while the same policy results in a smaller profit for the exporting firm, i.e. it is involuntary under a non-linear feedback strategy. Moreover, we prove an extended proposition of Dockner and Haug (1991) on voluntariness of VERs under a linear feedback strategy.

Network Externalities, Transport Costs and Tariffs

This paper formulates a reciprocal market model of international duopoly with network externalities to reconsider welfare effects of reductions in transport costs and tariffs. Depending on the magnitude of network externalities, we show two possibilities. One of them, which emerges under strong network externalities, illustrates that freer trade unambiguously improves welfare for any initial level of trade barriers. This finding provides an affirmative evaluation of freer trade.network externality, duopoly, transport costs, tariffs

Voracity, growth and welfare

This paper explores some implications of the comparison between feedback Nash and Stackelberg equilibria for growth and welfare in a `voracity' model. We show that as compared to the Nash equilibrium, the Stackelberg equilibrium involves a lower growth rate while it leaves both the leaders and the followers better o, i.e., the Stackelberg equilibrium is Pareto superior to the Nash equilibrium.Dynamic game, Growth, Welfare, Feedback Nash equilibrium, Feedback Stackelberg equilibrium

ENVIRONMENTAL POLICY AND TRADE LIBERALIZATION: THE CASE OF TRANSBOUNDARY POLLUTION FROM CONSUMPTION

This paper develops a reciprocal market model of international duopoly with transboundary pollution from consumption to examine the effects of bilateral tariff reductions on the equilibrium pollution tax and welfare. We show that tariff reductions induce each country to raise an emission tax and that trade liberalization is welfare-improving if the parameter of pollution damages is suciently large. These results are in contrast to the case of production-generated pollution and we seek the reason for this contrast.consumption-generated pollution, tariff reduction, emission tax, international duopoly.

Market integration, environmental policy, and transboundry pollution from consumption

Recent empirics report that transport cost reductions signicantly contribute to rapidly growing world trade. This paper develops a reciprocal market model of intra-industry trade with transboundary pollution from consumption to consider how market integration in the form of transport cost reductions aects the noncooperative choice of an environmental policy and the equilibrium welfare. I show that market integration can improve welfare locally, but that welfare under any non-prohibitive trade cost can not be higher than welfare under autarky. This possibility of trade losses exhibits a sharp contrast to the case of production-generated pollution.transboundary pollution, consumption-generated pollution, gains from trade; environmental policy

A Stackelberg Game Model of Dynamic Duopolistic Competition with Sticky Prices

We develop the following Stackelberg game model of dynamic duopoly with sticky prices the leader chooses its time profile of outputs to maximize the discounted sum of proftis, while the follower chooses the optimal output to maximize the instantaneous profit as a myopic profit maximizer at each point of time. Then, we compare the resulting outcomes with those in a Stackelberg model without price stickiness.dynamic duopoly

Losses from competition in a dynamic game model of a renewable resource oligopoly

This paper develops a dynamic game model of an asymmetric oligopoly with a renewable resource to reconsider welfare effects of increases in the number of firms. We show that increasing not only the number of inefficient firms but also that of Efficient firms reduces welfare, which sharply contrasts to a static outcome. It is discussed that the closed-loop property of feedback strategies plays a decisive role in this finding.Dierential game, Asymmetric oligopoly, Feedback strategy

Trade Patterns in an International Mixed Oligopoly

Developing a two-country model of international mixed oligopoly, this note makes clear the determinant of trade patterns. We give a simple formula to predict bilateral patterns of trade which relates the degree of a country's privatization and the trading country''s competitiveness. If a semi-public firm is not sufficiently privatized in a country, this country exports the non-competitive good.