Auction Quotas with a Foreign Duopoly

ByLing Hui Tan

March 1, 2000

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper uses a partial equilibrium framework to compare the welfare consequences of different methods of quota administration relative to free trade under imperfect competition. It shows that a country importing a good from foreign duopolists may improve its welfare by setting a quota at the free trade quantity and giving a fraction of the quota licenses to the duopolists while auctioning off the rest.

Subject: Asset prices, Import licensing, Imports, International trade, Prices, Trade barriers, Trade liberalization

Keywords: Asset prices, Auction quota, Australia and New Zealand, duopoly, Europe, free trade, Import licensing, importing country, Imports, license price, quota level, quota license, response function, Trade liberalization, WP

Pages:
21
Volume:
2000
DOI:
https://doi.org/10.5089/9781451848670.001
Issue:
065
Series:
Working Paper No. 2000/065
Stock No:
WPIEA0652000
ISBN:
9781451848670
ISSN:
1018-5941

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