Foreign Monopoly and Trade Policy under Segmented and Integrated Markets

This paper sets a single monopoly model and examines the effects of various trade policies on domestic, foreign and world economies under both segmented and integrated markets. In the segmented-markets case, the spillover effects which stem from non-constant marginal costs are explicitly dealt with. In the integrated-markets case, trade policies are examined in two different notions of market integration. Whether the markets are segmented or integrated, trade restrictions taken by one country may benefit the other country and/or the world economy. An application of the analysis is also given in the context of trade and environment.