Tariffs as signals of uncompetitiveness

Collie, David Robert ORCID: https://orcid.org/0000-0002-3132-648X and Hviid, Morten 1999. Tariffs as signals of uncompetitiveness. Review of International Economics 7 (4) , pp. 571-579. 10.1111/1467-9396.00182

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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
Date Type:	Publication
Status:	Published
Schools:	Business (Including Economics)
Publisher:	Wiley Blackwell
ISSN:	0965-7576
Last Modified:	27 Oct 2022 08:36
URI:	https://orca.cardiff.ac.uk/id/eprint/62821

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