Optimal allocation of quotas

Amihai Glazer*, Refael Hassin

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

Abstract

Consider a government which fixed the supply of a good (e.g. by an import quota). Suppose the market for the good can be partitioned (e.g. sales in different years or in different areas of the country can be considered sales in different markets). We show that maximization of consumer surplus in the domestic economy may require segmentation of the domestic market into two, but no more, parts.

Original languageEnglish
Pages (from-to)55-61
Number of pages7
JournalEconomics Letters
Volume58
Issue number1
DOIs
StatePublished - 1 Jan 1998

Keywords

  • D45
  • D61
  • D72
  • F13
  • Import quotas
  • Rationing
  • Regulation
  • Rent seeking

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