Tariffs vs. Quotas under Duopoly: A Conjectural Variation Approach Revisited

[[abstract]]Uses a conjectural variation approach to derive a general resultconcerning the equivalence of tariffs and quotas. Shows that, as long asthe quota is binding, the equivalence of tariffs and quotas dependsexclusively on the domestic firm's conjectural variations. Specifically,the domestic prices of the goods under the quota are higher than,identical to, or lower than those under the tariff if the domesticfirm's conjectural variation under the quota is larger than, equal to,or smaller than that under the tariff. This conclusion holds for bothprice-setting and quantity-setting duopoly with heterogeneous goods aswell as quantity-setting duopoly with homogeneous goods.[[fileno]]2070204010013[[department]]經濟學