@article{2b4290a66be34372a78d82b960bf6fd6,
title = "Nash and social welfare impact in an international trade model",
abstract = "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.",
keywords = "International duopoly, International trade, Nash equilibrium, Prisoner's dilemma, Social optimum, Tariffs game, Welfare",
author = "Filipe Martins and Pinto, {Alberto A.} and Zubelli, {Jorge Passamani}",
note = "Funding Information: Acknowledgments. The authors would like to thank Francis Bloch and the two anonymous referees for their suggestions. This work is financed by the ERDF - European Regional Development Fund through the Operational Programme for Competitiveness and Internationalisation - COMPETE 2020 Programme within project “POCI-01-0145-FEDER-006961”, and by National Funds through the FCT - Fun-da{\c c}{\~a}o para a Ci{\^e}ncia e a Tecnologia (Portuguese Foundation for Science and Technology) as part of project UID/EEA/50014/2013, and within project “Dynamics, Optimization and Modelling”, with reference PTDC/MAT-NAN/6890/2014. Part of this work was done during visits of the authors to Instituto de Matem{\'a}tica Pura e Aplicada - IMPA, Brasil, to whom they thank their hospitality. Alberto Adrego Pinto thanks LIAAD-INESC TEC and the financial support received through the Special Visiting Researcher Program (Bolsa Pesquisador Visitante Especial - PVE) “Dynamics, Games and Applications”, with reference 401068 / 2014-5 (call: MEC / MCTI / CAPES / CNPQ / FAPS) at IMPA, Rio de Janeiro, Brasil. F. Martins thanks the financial support of FCT - Funda{\c c}{\~a}o para a Ci{\^e}ncia e a Tecnologia -through a PhD. grant of the MAP-PDMA program with reference PD / BD / 105726 / 2014 and the financial support of Instituto de Matem{\'a}tica Pura e Apli-cada - IMPA, at the occasion of the 16th SAET Conference on Current Trends in Economics held in Rio de Janeiro, Brasil, where this work was presented. J. P. Zubelli was supported by CNPq grants 302161/2003-1 and 474085/2003-1 and by FAPERJ through the programs {\textquoteleft}Cientistas do Nosso Estado{\textquoteright} and {\textquoteleft}Pensa Rio{\textquoteright}. Publisher Copyright: {\textcopyright} 2017, American Institute of Mathematical Sciences.",
year = "2017",
doi = "10.3934/jdg.2017009",
language = "British English",
volume = "4",
pages = "149--173",
journal = "Journal of Dynamics and Games",
issn = "2164-6074",
publisher = "American Institute of Mathematical Sciences",
number = "2",
}