Welfare and political support effects of quotas in an oligopolistic market

Abstract

The welfare and political support effects arising from the actual or potential imposition of a quota are examined. There exists an obvious inherent conflict between domestic producers and domestic consumers. Increased imports cause a downward pressure on domestic prices and, hence, improve domestic consumer welfare while diluting domestic producer profits. This chapter specifically investigates how benevolent or self-interested policymakers respond to increased foreign competition in an oligopolistic market, that is, how they resolve the trade-off between domestic producer and consumer surplus as the number of foreign firms grows.

Citation

Haller, H. and Milam, R. (2000), "Welfare and political support effects of quotas in an oligopolistic market", Advances in Applied Microeconomics (Advances in Applied Microeconomics, Vol. 8), Emerald Group Publishing Limited, Leeds, pp. 161-185. https://doi.org/10.1016/S0278-0984(99)08008-6