Monopoly and Trade Policy
This paper presents a general equilibrium technique for the problem of ranking policies of a nation that trades with a foreign monopoly firm by presenting a generalization of the offer curve. The paper demonstrates the existence of a partial welfare ranking between ad valorem rates and specific rates, and it shows that a minimum import requirement welfare dominates other quantitative policies. The paper proves that a recent policy, the voluntary import expansion, has strongly adverse consequences: when trading with a foreign monopoly firm a nation implementing such a policy will achieve only its autarky level of welfare.
Document Object Identifier (DOI): 10.3386/w3475
Published: Journal of International Economics, vol. 36, no. 1/2, pp. 177-186, February 1994