Tariffs as signals of uncompetitiveness

Collie, David R. and Hviid, Morten (1999) Tariffs as signals of uncompetitiveness. Review of International Economics, 7 (4). pp. 571-579. ISSN 0965-7576

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Abstract

In this paper, a domestic and a foreign firm compete as Cournot duopolists in the domestic market. The foreign firm has incomplete information about the costs of the domestic firm, but the domestic government and the domestic firm are completely informed. It is shown that the domestic government can use its tariff to signal about the costs of the domestic firm. In the separating equilibrium, the domestic government signals the uncompetitiveness of the domestic firm by setting a lower tariff than is optimal under complete information.

Item Type: Article
Uncontrolled Keywords: competitiveness,tariff structure,theoretical study,trade relations
Faculty \ School: Faculty of Social Sciences > School of Law
Related URLs:
Depositing User: Julie Frith
Date Deposited: 16 Nov 2010 09:43
Last Modified: 21 Apr 2020 21:21
URI: https://ueaeprints.uea.ac.uk/id/eprint/10810
DOI: 10.1111/1467-9396.00182

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