{"title":"TARIFF RETALIATION AND THE FREE TRADE ARGUMENT","authors":"José Méndez Naya, Luciano Méndez Naya","doi":"10.1142/S0219198907001643","DOIUrl":null,"url":null,"abstract":"The effects of tariff wars on welfare are analysed for the case of trade between two countries with outputs of the traded good given exogenously. Assuming mild conditions, it is shown that if there are non-zero tariffs for which welfare-maximizing equilibrium holds, then free trade is not strictly preferable when the countries' outputs are equal, and if they are not equal is strictly disadvantageous to the country with the smaller output. Therefore, the main result of the paper is that free trade is not sustainable in an asymmetric context nor in a symmetric situation.","PeriodicalId":45451,"journal":{"name":"International Game Theory Review","volume":null,"pages":null},"PeriodicalIF":0.4000,"publicationDate":"2007-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1142/S0219198907001643","citationCount":"1","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"International Game Theory Review","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1142/S0219198907001643","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q4","JCRName":"MATHEMATICS, INTERDISCIPLINARY APPLICATIONS","Score":null,"Total":0}
引用次数: 1
Abstract
The effects of tariff wars on welfare are analysed for the case of trade between two countries with outputs of the traded good given exogenously. Assuming mild conditions, it is shown that if there are non-zero tariffs for which welfare-maximizing equilibrium holds, then free trade is not strictly preferable when the countries' outputs are equal, and if they are not equal is strictly disadvantageous to the country with the smaller output. Therefore, the main result of the paper is that free trade is not sustainable in an asymmetric context nor in a symmetric situation.
期刊介绍：
Rapid developments in technology, communication, industrial organization, economic integration, political reforms and international trade have made it increasingly imperative to recognize the causes and effects of strategic interdependencies and interactions. A strategic approach to decision-making is crucial in areas such as trade negotiations, foreign and domestic investments, capital accumulation, pollution control, market integration, regional cooperation, development and implementation of new technology, arms control, international resource extraction, network sharing, and competitive marketing. Since its inception, game theory has contributed significantly to the foundations of decision-making.
京公网安备 11010802042870号
京ICP备2023020795号-1
分享
求助内容：
应助结果提醒方式：
扫码关注我们
