While quotas can be expressed in tariff-equivalent terms and have identical economic effects under some conditions, they do not share the same welfare implications with tariffs in the presence of a piecemeal reform (second-best). In this paper we show that this non-welfare equivalence persists...

We model the situation where two large countries impose either tariffs or quotas and a third large country remains passive. The introduction of the third country overturns results from two-country models. Stable quota equilibria are capable of reproducing the equilibrium price under tariffs, and...