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Egli, Dominik
Westermann, Frank
Year of Publication: 
Series/Report no.: 
CESifo Working Paper 369
We present a unified treatment of optimal trade policy for a small country. The well-known results for duopoly and competitive markets emerge as benchmark cases of our model. In addition, we show that changes in market structure have non-monotonic effects on optimal tariffs. Our results suggest that the recent reduction of tariffs in Eastern Europe is consistent with welfare maximizing trade policy in response to the substantial changes in the market structure of these countries.
Market structure
strategic trade policy
rent shifting
Document Type: 
Working Paper

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