Electronic Resource
Oxford, UK and Boston, USA
:
Blackwell Publishers Ltd
Review of international economics
7 (1999), S. 0
ISSN:
1467-9396
Source:
Blackwell Publishing Journal Backfiles 1879-2005
Topics:
Economics
Notes:
Consumer arbitrage affects international pricing in several ways. If all consumers face the same arbitrage costs, a monopolist’s profit increases with arbitrage costs, and world welfare declines with them (if output does not rise). If arbitrage costs differ across consumers, a monopolist may sell in a second country even if there is no local demand—it can use the second country to discriminate across consumers in the first country. Again, world welfare typically falls with arbitrage costs. When there is also local demand in the second country, world welfare may be increasing in arbitrage costs, even if output falls.
Type of Medium:
Electronic Resource
URL:
http://dx.doi.org/10.1111/1467-9396.00151
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