Optimum-welfare and maximum-revenue tariffs under Bertrand duopoly.

Clarke, Roger and Collie, David Robert 2006. Optimum-welfare and maximum-revenue tariffs under Bertrand duopoly. Scottish journal of political economy 53 (3) , pp. 398-408. 10.1111/j.1467-9485.2006.00386.x

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Abstract

This article derives the maximum-revenue tariff and the optimum-welfare tariff under Bertrand duopoly with differentiated products. It is shown that both tariffs are lower under Bertrand duopoly than under Cournot duopoly. Also, the optimum-welfare tariff may exceed the maximum-revenue tariff under both Bertrand duopoly and Cournot duopoly. This result is more likely the lower the costs of the home firm relative to the costs of the foreign firm, and the greater the degree of product substitutability. Also, it is shown that the optimum-welfare tariff is less likely to exceed the maximum-revenue tariff under Bertrand duopoly than under Cournot duopoly.

Item Type:	Article
Date Type:	Publication
Status:	Published
Schools:	Business (Including Economics)
Uncontrolled Keywords:	Trade policy ; Imperfect competition ; Oligopoly
Publisher:	Published on behalf of the Scottish Economic Society
ISSN:	14679485
Last Modified:	04 Jun 2017 01:46
URI:	https://orca.cardiff.ac.uk/id/eprint/2523

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