Voluntary Import Expansions and Voluntary Export Restraints in an Oligopoly Model with Capacity Constraints
AbstractIn a three-country generalization of the Kreps-Scheinkman (1983) duopoly model with price competition and capacity constraints, the author analyzes the effects of discriminatory voluntary import expansions and voluntary export restraints on equilibrium capacity and pricing decisions. Voluntary export restraints are shown to be bad for the exporting country, contradicting recent results in the literature by R. Harris (1985) and K. Krishna (1989). Voluntary import expansions are shown to decrease competition. Cases are analyzed where voluntary import expansions may actually lead to import contraction or to increases in efficiency in the home country.
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Bibliographic InfoArticle provided by Canadian Economics Association in its journal Canadian Journal of Economics.
Volume (Year): 27 (1994)
Issue (Month): 2 (May)
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96-011, Purdue University, Krannert School of Management - Center for International Business Education and Research (CIBER).
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- Greaney, Theresa M., 1999. "Manipulating market shares: The indirect effects of voluntary import expansions (VIEs)," Japan and the World Economy, Elsevier, vol. 11(1), pages 95-113, January.
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