International effects of national regulations: External reference pricing and price controls

• 成果类型: Article
• 署名作者: Geng, Difei; Saggi, Kamal
• 署名单位: University of Arkansas System; University of Arkansas Fayetteville; Vanderbilt University
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2017.08.008
• 发表日期: 2017
• 页码: 68-84
• 关键词: External reference pricing policies; Price controls; Patented products; welfare

摘要

Under external reference pricing (ERP) the price that a government permits a firm to charge in its market depends upon the firm's prices in other countries. In a two-country (home and foreign) model where demand is asymmetric across countries, we show that home's unilaterally optimal ERP policy permits the home firm to engage in a threshold level of international price discrimination above which it is (just) willing to export. If the firm faces a price control abroad or bargains over price with the foreign government, an ERP policy can even yield higher home welfare than a direct price control. (C) 2017 Elsevier B.V. All rights reserved.