Oligopoly and Customs Unions

Raymond Riezman

doi:10.4324/9780203074206-9

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Book chapter

Oligopoly and Customs Unions

Raymond Riezman

Trade, Theory and Econometrics, pp.134-148

Routledge studies in the modern world economy, 15, Routledge

1999

DOI: 10.4324/9780203074206-9

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Abstract

In this chapter we analyze a model of international oligopoly when customs unions are possible. We show that importer-exporter customs unions are pro-competitive in the sense that internally they will tend to have industries produce at their competitive output level, but will tend to exclude imports from non-member countries. Exporter customs unions are anti-competitive and will produce the monopoly output. We apply core theory to determine which unions would form. With one firm in each country the importer will form a union with the low cost exporter. With identical costs, but variable numbers of firms, when the number of firms is small an importer-exporter customs union forms. A union of the exporters will form if there are four or more firms in the world.

Command Economy

Open Interval

Partial Ordering

Nominal National Income

Virtual Quantity

GPP

Le Chatelier Principle

Le Chatelier

Production Targets

Capital Mobility

Setting Production Targets

Positive Definite Quadratic Form

Intrinsic Ability

Baseline Economy

Quadratic Adjustment Costs

Factor Endowment

Technology Shocks

Factor Price Adjustments

Exogenous Shocks

Small Open Economy

Revenue Function

Factor Mobility

Details

Title: Subtitle: Oligopoly and Customs Unions
Creators: Raymond Riezman
Resource Type: Book chapter
Publication Details: Trade, Theory and Econometrics, pp.134-148
Series: Routledge studies in the modern world economy; 15
DOI: 10.4324/9780203074206-9
Publisher: Routledge; London
Alternative title: Oligopoly and Customs Unions
Language: English
Date published: 1999
Academic Unit: Economics
Record Identifier: 9984963080302771

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