| dc.description.abstract | This study analyzes how quality affects manufacturers’ pricing under the duopoly market structure. First, we found that when the quality of high-quality products increases, the two manufacturers will increase their pricing due to the decline in competition. When the quality of low-quality products increases, the price of high-quality products will decrease. The price of low-quality products will increase first and then decrease, depending on the effect of consumers′ willingness to pay and the effect of increased competition. Furthermore, if the quality of high-quality products increases, the government of the importing country will increase the optimal tariff. If the quality of low-quality products increases, the government of the importing country may increase or decrease the optimal tariff depending on different effect. In addition, we have also found that when the tariff is endogenous, the quality of high-quality products increases, which will cause the profits of low-quality manufacturers under a single tariff to rise first and then decline. While the profits of low-quality manufacturers under different tariffs will not have same result. That is because the quality improvement of high-quality manufacturers not only reduces the degree of competition, but also increases the import tariffs imposed by the government of importing countries. At last, we observe that the high-quality manufacturers may be willing to invest directly in low-quality countries due to lower import tariffs, while low-quality manufacturers will not choose to invest directly in high-quality countries due to higher tariffs. | en_US |