Free trade versus autarky under asymmetric Cournot oligopoly
Abstract
The paper compares free trade with autarky in an asymmetric multi-country world under Cournot competition with constant returns to scale and linear demand. We derive respective conditions under which free trade will hurt a country's consumers, benefit its firms, induce it to export, increase its output and raise its welfare. We show that these conditions are linked in a clear order, with one implying the next. We further demonstrate that free trade can reduce world total output and total consumer surplus as well as world welfare. Along the way, we correct several oversights in the literature.
Citation
Amir , R , Jin , J Y & Tröge , M 2017 , ' Free trade versus autarky under asymmetric Cournot oligopoly ' , Review of International Economics , vol. 25 , no. 1 , pp. 98-107 . https://doi.org/10.1111/roie.12257
Publication
Review of International Economics
Status
Peer reviewed
ISSN
1467-9396Type
Journal article
Collections
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