Tariffs and Quotas in a Spatial Duopoly with a Land Market

This paper develops a spatial duopoly model by taking land consumption and mobile households into consideration and examines the respective effects of a tariff and a quota on an open economy with various price conjectural variations (including Loschian, H-S and G-O competition). The main conclusions are: (i) The Metzler Paradox does not occur under a tariff but occurs under a quota in Loschian competition; (ii) The tariff and the quota are completely equivalent under H-S competition if the nature of the quota constraint does not affect the original price conjectures; (iii) If an import equivalent quota induces a change in the domestic producer's strategy from Loschian (H-S and G-O) competition to the price leadership position, then the quota yields domestic prices which are lower (higher) than those induced by a tariff