A Differential Game Model of Tariff War.

We present a simple two(-country) by two(-good) differental game model of international trade in which the governments of the two countries play a tariff-setting game. We explicitly derive a unilateral optimum tarifff rate and then a Markov-perfect equilibrium pair of tariff strategies (bilateral optimum tariff strategies) and compare the welfare level of each country among autarchic, free-trade, unilateral and bilateral optimum-tariff equilibria.

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Year of publication:	2000
Authors:	Kemp, M.C. ; Van Long, N. ; Shimomura, K.
Subject:	GAME THEORY \| INTERNATIONAL TRADE

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Type of publication:	Book / Working Paper
Notes:	22 pages
Classification:	D90 - Intertemporal Choice and Growth. General ; F13 - Commercial Policy; Protection; Promotion; Trade Negotiations
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005641362