Nash and social welfare impact in an international trade model

Filipe Martins, Alberto A. Pinto, Jorge Passamani Zubelli

Research output: Contribution to journalArticlepeer-review

1 Scopus citations


We study a classic international trade model consisting of a strategic game in the tariffs of the governments. The model is a two-stage game where, at the first stage, governments of each country use their welfare functions to choose their tariffs either (i) competitively (Nash equilibrium) or (ii) cooperatively (social optimum). In the second stage, firms choose competitively (Nash) their home and export quantities. We compare the competitive (Nash) tariffs with the cooperative (social) tariffs and we classify the game type according to the coincidence or not of these equilibria as a social equilibrium, a prisoner's dilemma or a lose-win dilemma.

Original languageBritish English
Pages (from-to)149-173
Number of pages25
JournalJournal of Dynamics and Games
Issue number2
StatePublished - 2017


  • International duopoly
  • International trade
  • Nash equilibrium
  • Prisoner's dilemma
  • Social optimum
  • Tariffs game
  • Welfare


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