Uncertainty costs on an international duopoly with tariffs

Choubdar, M.; Faria, E.; Ferreira, Fernanda A.; Pinto, Alberto A.

http://hdl.handle.net/10400.22/9052

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Authors

Choubdar, M.

Faria, E.

Ferreira, Fernanda A.

Pinto, Alberto A.

Abstract(s)

We consider two firms located in different countries selling the same homogeneous good in both countries. In each country there is a tariff on imports of the good produced in the other country. We show that the expected welfare of the countries increase with the variances of the production costs of both firms.