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Maximum-revenue tariff under Bertrand duopoly with unknown costs
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Orientador(es)
Resumo(s)
This paper considers an international trade under Bertrand model with differentiated products and with unknown production costs. The home government imposes a specific import
tariff per unit of imports from the foreign firm. We prove that this tariff is decreasing in the expected production costs of the foreign firm and increasing in the production costs of the home firm. Furthermore, it is increasing in the degree of product substitutability. We also show that an increase in the tariff results in both firms increasing their prices, an increase
in both expected sales and expected profits for the home firm, and a decrease in both
expected sales and expected profits for the foreign firm.
Descrição
Palavras-chave
Game theory Industrial organization Optimization Bertrand model Tariffs Uncertainty
Contexto Educativo
Citação
Editora
Elsevier Science BV