The importance of fixed costs in the design of trade policies: An exercise in the theory of second best

• Autores: Luis C. Corchón Díaz, Miguel González-Maestre
• Localización: Working papers = Documentos de trabajo: Serie AD, Nº. 16, 1994, págs. 1-36
• Idioma: inglés
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• Resumen

  • In this paper we study the optimal trade policy in an oligopolistic market with a given number of quantity-setter firms. It is shown that under no fixed costs, the optimal trade policy displays certain characteristics but under fixed costs most of these characteristics no Longer hold.