Strategic Trade Between Two Countries—Exploring the Case of Partial Local Consumer Protection

Iordan Iordanov, Andrey Vassilev
2017 Serdica Journal of Computing  
The paper develops a dynamic model of trade between twocountries where the trading entities interact in a strategic context. Consumersin both countries are endowed with certain incomes and try to acquireas much as possible of the quantities available on the markets. Consumershave privileged access to some of the good supplied locally, a form of partiallocal protection. Over time, prices are adjusted to respond to the outcomesof trading. For this setup, we prove the existence of Nash equilibria
more » ... ndsimulate the model numerically in Python to illustrate the possibility of obtainingdifferent types of price dynamics depending on the price adjustmentrule used.ACM Computing Classification System (1998): J4, G4, I.6.3.
doi:10.55630/sjc.2017.11.31-43 fatcat:kzwhuurrbrbeldllry63kqxe6i