This paper argues that trade liberalization has a potentially significant impact on financial leverage. We compare the predictions of the trade-off model of capital structure with the pecking order model. In the first case, we suggest that trade liberalization affects the trade-off between the tax advantages of debt and expected bankruptcy costs. This implies that a reduction in domestic tariff...

We propose a model of flexible trade agreements in which verifying the prevailing contingencies is possible but costly. Two types of flexibility emerge: contingent protection, which requires governments to verify the state of the world, and discretionary protection, which allows governments to set tariffs unilaterally. The structure of the GATT/WTO agreement provides these two types of flexibil...

When a monopolist asks consumers to choose a particular nonlinear tariff option, consumers do not completely know their type. Their valuations of the good and/or optimal quantity purchases are only fully realized after the optional tariff has been subscribed. In order to characterize the menu of optimal nonlinear tariffs when consumers demands are stochastic, I assume that the distributions of ...

Using the Laffont, Rey and Tirole (1998) framework, a model of competition between vertically integrated telecommunications networks in a deregulated environment is developed. Two local operators compete in linear and non linear tariffs (i.e. two-part tariffs) in the subscribers market. In addition, they are integrated downstream in a potentially competitive sector (i.e. long distance sector) w...

This paper introduces a new approach to establish electricity tariffs based on experts’ fuzzy estimations on the example of Georgia. The existent situation in tariffication processes is considered. The necessity to use new approaches for implementation of these processes is discussed. A new method for calculations of electricity tariffs based on fuzzy set theory is introduced and its algorithm ...

Firms commonly offer three-part tariffs, or menus of three-part tariffs, in a variety of contexts. A three-part tariff consists of a fixed fee, an included allowance of units for which the marginal price is zero, and a positive marginal price for additional usage beyond the allowance. A prime example is the US cellular phone services market in which firms typically offer consumers plans consist...

During the last two decades there has been an increase in using dynamic tariffs for billing household electricity consumption. This has questioned the suitability of traditional pricing schemes, such as two-part tariffs, since they contribute to create marked peak and offpeak demands. The aim of this paper is to assess if two-part tariffs are an efficient pricing scheme using Spanish household ...

Services like FedEx charge up-front fees but reimburse customers for delays. However, lead time pricing studies ignore such delay refunds. This paper contributes to filling this gap. It studies revenue-maximizing tariffs that depend on realized lead times for a provider serving multiple time-sensitive customer types. We relax two key assumptions in the standard model since Naor (1969). First, c...

Regional integration agreements (RIAs) are examples of second best and have an ambiguous impact on welfare. This paper builds a model where RIAs unambiguously raise welfare by correcting for externalities. It assumes that trade between neighboring countries raises trust between them and reduce the likelihood of conflict. The optimum intervention in that case is a subsidy on imports from the nei...

Policy-makers and analysts are often concerned with the effect of tariff reductions, as part of trade liberalisation, on the volume of imports, and in particular adverse effects on domestic import-competing sectors. While there is limited evidence at an aggregate country level that imports increase following trade liberalisation, there is very little empirical evidence at a sector level. In the...