The size of trading blocs - Market power and world welfare effects

• 成果类型: Article
• 署名作者: Bond, EW; Syropoulos, C
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/0022-1996(95)01412-8
• 发表日期: 1996
• 页码: 411-437
• 关键词: Regionalism; trading blocs; strategic interactions; market power; welfare

摘要

We construct an n-country n-commodity trade model to analyze the implications of bloc size for (Nash) equilibrium tariffs and welfare. The relationship between the absolute size of (symmetric) trading blocs and their market power is ambiguous, and we illustrate how this relationship varies with model parameters. In contrast, sufficiently large increases in the relative size of a bloc enhance its relative market power and cause the welfare of its country members to rise above the free trade level. We establish the existence of an optimal bloc size, and study the dependence of optimal size on the parameters of the model.