Sub-national differentiation and the role of the firm in optimal international pricing / Edward J. Balistreri, James R. Markusen
- Balistreri, Edward J. (Edward Jay)
- Additional Titles:
- Sub national differentiation and the role of the firm in optimal international pricing and Subnational differentiation and the role of the firm in optimal international pricing
- Cambridge, Mass. : National Bureau of Economic Research, 
- Copyright Date:
- Physical Description:
- 36 pages : illustrations ; 22 cm.
- Additional Creators:
- Markusen, James R., 1948- and National Bureau of Economic Research
- "We illuminate the relationship between optimal firm pricing and optimal trade policy by exploring a generalized model that accommodates product differentiation at both the national and sub-national (firm) levels. We assume monopolistic competition in the differentiated products at the sub-national level. When the national and sub-national substitution elasticities are similar we find little opportunity for small countries to improve their terms of trade through trade distortions, because firms play an important preemptive role in optimally pricing unique varieties. We contrast this with standard applications of perfect-competition Armington models, which exhibit high optimal tariffs--even for relatively small countries."--abstract.
- "May 2007."
- Bibliography Note:
- Includes bibliographical references (pages 30-32).
- Other Forms:
- Also available in PDF from the NBER world wide web site (www.nber.org).
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