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Title: |
Delegation and Strategic Trade Policy |
| Author: |
Collie, David
R. |
| Author
Affiliation: |
Cardiff
Business School |
| Source: |
International Economic Journal, Autumn 1997, v. 11, no. 3, pp. 35-46 |
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Publication Date: |
Autumn 1997 |
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Abstract: |
In a trade policy game where the domestic
government uses a tariff and the foreign government uses an export
subsidy, it is shown that the domestic government should delegate to a
policy-maker who attaches less weight to the profits of the domestic
firm than the welfare maximising government. This makes domestic trade
policy less aggressive and increases both domestic and foreign welfare.
It is even possible that the optimal policy-maker attaches a negative
weight to the profits of the domestic firm. |
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