This paper models the competition for a domestic market between one domestic and one foreign firm as a pricing game under incomplete cost information. As the foreign firm incurs a trade cost to serve the domestic market, it prices more aggressively, giving rise to the possibility of an inefficient allocation. In spite of asymmetric information, we can devise a contingent trade policy to correct this potential market failure. National governments, however, make excessive use of such a policy due to rent shifting motives, thus creating another inefficiency. The expected inefficiency of national policy is found to be comparatively larger (lower) at low (high) trade costs. Hence contingent trade policy conducted by national governments is preferred only when trade costs are high.

中文翻译：

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或有贸易政策与经济效率

本文将不完全成本信息下的定价博弈模型化为一家国内公司与一家外国公司之间的国内市场竞争。由于外国公司为服务于国内市场而招致交易成本，因此其价格更加激进，从而导致分配效率低下的可能性。尽管信息不对称，我们仍可以制定一项临时交易政策来纠正这种潜在的市场失灵。但是，由于租金转移的动机，各国政府过度使用了这种政策，从而造成了另一个低效率的情况。发现在低（高）贸易成本的情况下，预期的国家政策效率较低（相对较低）。因此，只有在贸易成本较高时，才应首选由国家政府实施的临时贸易政策。