• About
    • Login
    View Item 
    •   Institutional Repository Home
    • College of Arts and Science
    • Department of Economics
    • Working Papers
    • View Item
    •   Institutional Repository Home
    • College of Arts and Science
    • Department of Economics
    • Working Papers
    • View Item
    JavaScript is disabled for your browser. Some features of this site may not work without it.

    Browse

    All of Institutional RepositoryCommunities & CollectionsBy Issue DateAuthorsTitlesSubjectsDepartmentThis CollectionBy Issue DateAuthorsTitlesSubjectsDepartment

    My Account

    LoginRegister

    Strategic Competition and Optimal Parallel Import Policy

    Saggi, Kamal
    Roy, Santanu
    : http://hdl.handle.net/1803/15907
    : 2011

    Abstract

    This paper shows that parallel import policy can act as an instrument of strategic trade policy. We demonstrate this result in two-country international duopoly where a domestic monopolist competes with a rival firm in the foreign market if it chooses to incur the fixed investment cost of exporting. The two firms sell horizontally differentiated goods and compete in prices. When the foreign market is significantly larger than the domestic one, the home firm gains if it is unable to price discriminate; its desire to not deviate too far from its optimal monopoly price in the domestic market makes it (credibly) less aggressive in price competition abroad which softens price competition and raises profits. On the other hand, when the foreign market is not significantly larger, it is optimal for the home country to forbid parallel imports since international price discrimination yields higher profits to the home firm. We draw out the implications of the two types of parallel import policies for global welfare.
    Show full item record

    Files in this item

    Icon
    Name:
    vu11-w17.pdf
    Size:
    193.2Kb
    Format:
    PDF
    View/Open

    This item appears in the following collection(s):

    • Working Papers

    Connect with Vanderbilt Libraries

    Your Vanderbilt

    • Alumni
    • Current Students
    • Faculty & Staff
    • International Students
    • Media
    • Parents & Family
    • Prospective Students
    • Researchers
    • Sports Fans
    • Visitors & Neighbors

    Support the Jean and Alexander Heard Libraries

    Support the Library...Give Now

    Gifts to the Libraries support the learning and research needs of the entire Vanderbilt community. Learn more about giving to the Libraries.

    Become a Friend of the Libraries

    Quick Links

    • Hours
    • About
    • Employment
    • Staff Directory
    • Accessibility Services
    • Contact
    • Vanderbilt Home
    • Privacy Policy