Business, Management and Accounting
4 years ago

Export taxes in Nash equilibrium boost welfare over free trade in duopoly.

RePEc: Research Papers in Economics
Welfare in the Nash Equilibrium in Export Taxes under Bertrand Duopoly
Roger Clarke, David R. Collie

Paper Summary

Export taxes in a Bertrand duopoly lead to higher welfare in the Nash equilibrium compared to free trade, as shown in the Eaton and Grossman (1986) model.

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