Trade Policies for Exporting Industries under Free Entry

2001 ◽  
Vol 2 (4) ◽  
pp. 327-338 ◽  
Author(s):  
Roberto A. De Santis ◽  
Frank Stähler
Keyword(s):  
Export Price ◽  
Perfect Competition ◽  
Trade Policies ◽  
Free Entry ◽  
Market Structures ◽  
Demand Functions ◽  
Tax Subsidy ◽  
Monopoly Price ◽  
Export Taxes ◽  
Production Subsidies

Abstract This paper computes optimal export taxes and domestic production subsidies for exporting industries under free entry.We show that domestic welfare is not at maximum, as is typically believed, when the export price is a monopoly price, and the domestic price is a competitive price, because a market structure effect has to be taken into account. Furthermore, we show that the optimal tax/subsidy formulas for an oligopoly coincide with those under perfect competition, if foreign and domestic demand functions are both linear. We also discuss optimal trade policies when only one instrument is available, and we run numerical simulations to determine and compare optimal trade taxes under endogenous and exogenous market structures.

Inter-market Variability of Smallholder Beef Cattle Farming in East Java Indonesia

2021 ◽  
Vol 7 (2) ◽  
pp. 176-190
Author(s):  
Andrie Kisroh Sunyigono ◽  
Isdiana Suprapti ◽  
Nurul Arifiyanti
Keyword(s):  
Beef Cattle ◽  
Concentration Ratio ◽  
Perfect Competition ◽  
Commodity Chain ◽  
Barriers To Entry ◽  
Gini Coefficients ◽  
Market Structures ◽  
Output Market ◽  
High Investment ◽  
Analytical Tools

Indonesia has failed to achieve meat self-sufficiency; meanwhile, East Java is among the centers of beef cattle with a relatively high contribution in terms of GDP and employment. Therefore, this study aims to identify and analyze the market structure of the beef cattle commodity chain by considering the concentration ratio, Gini Index, as well as barriers to exit and entry. The study was conducted in Malang Regency and Sapudi Island, with 164 respondents, which consisted of calf suppliers, farmers, traders, and slaughterhouses. Furthermore, the analytical tools used include descriptive, concentration ratio, Gini Coefficient, and analysis of barriers to entry and exit. Based on the results, the market structures in the beef cattle commodity chain in terms of its input market was perfect competition, while the intermediate and output market was oligopoly. These results were confirmed by the concentration ratios of calf suppliers and farmers, which were lower than the ratios of traders and slaughterhouses. Although the market structures were different, their Gini Coefficients are almost similar because a value of 0.2 showed an equitable distribution. Additionally, the barriers to entry into the market were high investment with a large number of import and market problems. Meanwhile, the barriers to exit the market were a large number of potential demands, high investment, and a source of income.

Sherman Act 1890: Modernization and Impact on Markets

2021 ◽  
Vol 9 (3) ◽  
pp. 104-108
Author(s):  
Alex Han
Keyword(s):  
Chicago School ◽  
Perfect Competition ◽  
Barriers To Entry ◽  
Free Entry ◽  
Major Purpose ◽  
Free Competition ◽  
Sherman Act ◽  
Antitrust Laws ◽  
American Economy ◽  
Harvard School

The major purpose of the Sherman Act was to prevent mergers from forming monopolies. It ensures consumers are protected from price discrimination, and there is free competition. Several economists, classical economists, neoclassical economists, Chicago school and Harvard school, pointed out several antitrust laws. Classical economists led by Smith argued that monopolists set prices at higher prices and raise their charges higher through understocking the markets hence corporations and mergers should be prevented. Neoclassical economists developed a model which assumes that there are no barriers to entry whereby there is free entry to the market. Harvard school also advocated for free competition. Either, the Chicago school was against the idea of free competition and proposed some acts from the antitrust laws to be removed.  However, with advancements in technology, the Sherman Act has become outdated and some languages used are held, making it a challenge to interpret in courts. There is a need for the antitrust laws to be reformed to fit the changing technology. Bills should be proposed to make improvements to the acts. For example, Klobuchar Amy, in April 2021, proposed a bill seeking to reform antitrust laws to better perfect competition in the American economy.

Canada-U.S. softwood lumber dispute: background.

2021 ◽  
pp. 10-26
Author(s):  
G. Cornelis van Kooten ◽  
Harry Nelson ◽  
Fatemeh Mokhtarzadeh
Keyword(s):  
Supply And Demand ◽  
Tariff Rate ◽  
Gains From Trade ◽  
Excess Supply ◽  
Demand Functions ◽  
Softwood Lumber ◽  
Modeling Approaches ◽  
Tariff Rate Quotas ◽  
Export Taxes ◽  
History Of

Abstract In this chapter, we examine the importance of softwood lumber production to Canada's economy and provide a brief history of the Canada-U.S. softwood lumber dispute and its resolution on various occasions using U.S. countervailing and anti-dumping duties, export taxes or various types of quota regimes, including tariff rate quotas. The construction of excess supply and demand functions is explained, as are the gains from trade. This helps inform the modeling approaches that are identified in later chapters.

scholarly journals Income Distributional Impacts of Trade Policies in a Multi-Market Framework: A Case in Pakistan

2000 ◽  
Vol 32 (1) ◽  
pp. 49-61 ◽  
Author(s):  
Darren Hudson ◽  
Don Ethridge
Keyword(s):  
Price Control ◽  
Trade Policies ◽  
Domestic Consumption ◽  
Social Loss ◽  
Export Tax ◽  
Export Taxes ◽  
Market Framework ◽  
Yarn Production ◽  
The Government ◽  
Distributional Impacts

AbstractThe impacts of using export taxes as a price control in a multi-market framework are explored using the cotton and yarn sectors in Pakistan as examples. Results show that the export tax on cotton increased domestic consumption and decreased exports of cotton in Pakistan, transferring income from cotton producers to yarn spinners and the government. There was a social loss to Pakistan in the cotton sector. The export tax on cotton increased domestic yarn production, consumption, exports, and incomes of yarn spinners, but resulted in a large transfer (social loss) out of the yarn sector.

scholarly journals Import Demands For U.S. Fresh Grapefruit: Effect Of U.S. Promotion Programs And Trade Policies Of Importing Nations

1992 ◽  
Vol 24 (1) ◽  
pp. 251-260 ◽  
Author(s):  
Stephen Fuller ◽  
Haruna Bello ◽  
Oral Capps
Keyword(s):  
Exchange Rates ◽  
Capita Income ◽  
Generalized Least Squares ◽  
Import Demand ◽  
Trade Policies ◽  
Sample Period ◽  
Trade Restrictions ◽  
Foreign Markets ◽  
Demand Functions ◽  
Per Capita

AbstractThis study estimated import demands for U.S. fresh grapefruit in Japan, France, Canada, and the Netherlands. Historically, these nations have imported about 90 percent of U.S. grapefruit exports. Four import demand functions were specified and estimated by joint generalized least squares based on the sample period 19691 to 1988IV. Results show that U.S. FOB price, per capita income of importing countries, exchange rates, price of substitutes, U.S. grapefruit promotion programs, and removal of trade restrictions have had an important effect on U.S. fresh grapefruit exports. Analyses suggest that U.S. producers can effectively promote fresh grapefruit in foreign markets, and that trade concessions have an important influence on grapefruit exports.

scholarly journals Modeling trade policies under alternative market structures

2014 ◽  
Vol 36 (1) ◽  
pp. 185-206
Author(s):  
Giovanni Anania ◽  
Margherita Scoppola
Keyword(s):  
Trade Policies ◽  
Market Structures

CONSUMER MISTAKES IN BERTRAND GAMES

2009 ◽  
Vol 11 (01) ◽  
pp. 41-51 ◽  
Author(s):  
BRYAN C. MCCANNON
Keyword(s):  
Marginal Cost ◽  
Search Costs ◽  
Full Measure ◽  
Free Entry ◽  
Monopoly Price ◽  
Bertrand Game ◽  
Bertrand Games

The identical agent, identical good Bertrand game is associated with prices at marginal cost — the Bertrand Paradox. If consumers make occasional mistakes I show that the standard Bertrand game gives rise to positive profits and prices above marginal cost. Some firms charge low prices to capture the bulk of the sales while others charge high prices selling to mistaken consumers. Furthermore, with free entry the Diamond Paradox arises; a full measure of the firms choose the monopoly price. As a result, the Diamond Paradox arises in an environment with zero search costs by replacing searching costs with searching errors.

scholarly journals Percobaan Ekonomi untuk Mengkaji Pengaruh Informasi serta Jumlah Penjual dan Pembeli dalam Transaksi Pasar

The Winners ◽  
2010 ◽  
Vol 11 (1) ◽  
pp. 43
Author(s):  
Edy Supriyadi
Keyword(s):  
Everyday Life ◽  
High Efficiency ◽  
Experimental Methods ◽  
Perfect Competition ◽  
Double Auction ◽  
Market Structures ◽  
Contract Price ◽  
Goods And Services ◽  
Monopoly Market ◽  
Very High

Perfect competition (PPS) is the most ideal market structure because this market system is considered will ensure the realization of activities producing goods and services with very high efficiency compared to other market structures such as monopoly. Due to its benefits for sellers and buyers, economists often wish for the creation of perfect competition. In the pattern of transactions in everyday life, there are many market transactions commonly encountered, such as decentralized systems (DT), and Double Auction (DA). This paper presents the use of experimental methods to study the characteristics of both systems the transaction is in a "perfect competition” (5 sellers and 5 buyers' and market monopoly (with 1 seller and 5 buyers). Responses observed are Contract Price (CP), market efficiency, CP diversity coefficient on the price balance, buyer surplus and seller surplus. From the experimental results can be seen that the average Contract Price (CP) during 5 experimental periods that the value of CP at Perfect Competition Market is smaller than the monopoly market. From efficiency levels between transactions type it can be seen that the Double Auction type of transaction is more efficient than with the Decentralization type of transaction.

Market structure and knowledge acquisition by firms

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Pedro Hemsley ◽  
Rafael Morais ◽  
Karinna Di Iulio
Keyword(s):  
Knowledge Acquisition ◽  
Open Economy ◽  
Perfect Competition ◽  
Content Type ◽  
Firm Theory ◽  
Market Structures ◽  
Us Economy ◽  
The Us ◽  
Main Input ◽  
The Relationship

PurposeRecent models in firm theory assume that problems have to be solved for production to take place and that knowledge is the main input for problem-solving. This paper characterizes the relationship between the predictability of production prcesses and investment in knowledge.Design/methodology/approachThis paper uses a theoretical model of firm theory to study investment in knowledge by a simplified one-layer firm with a stochastic technology, across different market structures, and develops a calibration exercise to illustrate the results.FindingsFirms working closer to the production frontier (those with a larger efficient scale in perfect competition, facing a higher demand in monopoly or more competitive internationally in an open economy) react more in terms of investment in knowledge when problem predictability changes. Investment in knowledge becomes nearly insensitive to such changes for firms with a low output, i.e. those far from the frontier. A calibration exercise suggests that the elasticity of knowledge with respect to the predictability of problems was around 0.59 for the US economy for the period 1980–2020.Originality/valueThese are the first nonambiguous results on the relationship between the predictability of production processes and investment in knowledge and help understanding knowledge acquisition by different firms in distinct competitive environments.

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