Tariffs, quality reversals and exit in vertically differentiated industries

• 成果类型: Article
• 署名作者: Herguera, I; Kujal, P; Petrakis, E
• 署名单位: Universidad Carlos III de Madrid; Complutense University of Madrid; University of Crete
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/S0022-1996(02)00014-4
• 发表日期: 2002
• 页码: 467-492
• 关键词: Vertical differentiation; import tariffs; quality reversals; EXIT

摘要

In a vertically differentiated industry a domestic and a foreign firm first choose the quality of their goods and then compete in quantities, or prices, in the home market. We investigate the cases in which a tariff is chosen before, or after, the firms' quality decision. These cases are referred to as the ex-ante and the ex-post game, respectively. Optimal ex-post tariffs are positive and ensure that the domestic firm always produces the high quality good. The optimal ex-ante tariff is prohibitive and welfare under domestic monopoly is lower than under ex-post tariffs, unless firms compete in prices and the domestic firm is high quality. (C) 2002 Elsevier Science B.V. All rights reserved.