This article examines the welfare equivalence of alternative modes of protection for the domestic input producers in duopolistic environment when tariffication is adopted in the input tier. We use the definition of equivalence introduced by Vousden (1987). In contrast to Vousden (1987), we find that when the final good producers have Cournot conjectures, a content protection scheme (CPS) may be more efficient in respect of both protection and social welfare compared to the X-equivalent tariff or not depending on the value of the parameters.
AcharyyaR. (1995). Protective effects of source-specific VER and global quota under Oligopoly. Keio Economic Studies, 32(2), 65–70.
2.
AcharyyaR. (1999). Who prefers quotas to VER and when? A case of differentiated oligopoly. Keio Economic Studies, 36(1), 51–60.
3.
BanerjiJ. (1993). Welfare implications of free trade and alternative trade policies in a strategic model: A conjectural variation approach. Unpublished M.Phil. Dissertation, University of Calcutta, Kolkata, India.
4.
BhagwatiJ. N. (1965). On the equivalence of tariffs and quotas. In RobertBaldwin (Ed.), Trade, growth and the balance of payments, Essays in honour of Gottfried Haberler (pp. 53–67). Chicago: Rand McNally.
5.
BranderJ. A.SpencerB. J. (1984). Trade warfare: Tariffs and cartels. Journal of International Economics, 16(3), 227–242.
6.
BranderJ. A.SpencerB. J. (1985). Export subsidies and international market sharing rivalry. Journal of International Economics, 18(1–2), 83–100.
7.
GrossmanG. M. (1981). The theory of domestic content protection and content Preference. Quarterly Journal of Economics, 96(4), 583–603.
8.
HwangH.MaiC. (1988). On the equivalence of tariffs and quotas under duopoly. Journal of International Economics, 24(3–4), 373–380.
9.
JonesR. W. (1987). Trade taxes and subsidies with imperfect competition. Economic Letters, 23(4), 375–379.
10.
KowalczykC.SkeathS. E. (1994). Pareto ranking optimal tariffs under foreign monopoly. Economic Letters, 45(4), 355–359.
11.
KrishnaK.ItohM. (1988). Content protection and oligopolistic interactions. Review of Economic Studies, 55(1), 107–125.
12.
KrugmanP. (1984). Import protection as export protection: International competition in the presence of oligopoly and economies of scale. In HenrykKierzkowski (Ed.), Monopolistic competition and international trade (pp. 75–86). Oxford: Clarendon Press.
13.
VousdenN. (1987). Content protection and tariffs under monopoly and competition. Journal of International Economics, 23(3–4), 263–282.