Cascading contingent protection and vertical market structure

Cascading contingent protection may occur when protection of an upstream industry transfers injury to the downstream industry and increases the likelihood that this industry asks and receives protection. This paper examines cascading protection within a sequential petitioning model where the upstream industry acts as leader. The analysis identifies market structure and the vertical linkage between the: upstream and the downstream industry as important determinants of the occurrence of cascading protection. It is shown that the circumstances which make cascading protection more likely to occur also make it more Likely that this protection has serious negative welfare consequences. (C) 1998 Elsevier Science B.V. All rights reserved.