The Implications of Imperfect Competition Theory Applied to International Commodity Markets on Policy Analysis

摘要

Most empirical models of world agricultural commodity markets initially assume a competitive market and then introduce trade barriers into the model. This research reviews several theoretical models of imperfect competition, which when applied to international commodity markets demonstrate that the assumption of market structure is critical in determining the impacts of a policy change upon the market equilibrium and welfare distribution. Further this analysis explicitly recognizes the impact of retaliatory trade policies on market equilibrium and welfare.