Tariffs Versus Ratio Quotas Under Oligopoly

Abstract

This paper re-examines the equivalence of tariffs and ratio quotas using a model of oligopoly of domestic firms and foreign firms. It is shown that the equivalence of tariffs and ratio quotas depends very much on the conduct of the domestic firms; thus, the market behavior of the domestic firms over consumers influences the results. It is also shown that ratio quotas and volume quotas are not necessarily nonequivalent. The duopoly results of the previous studies can be obtained as special cases of the results in this paper. [F13]