On the Impact of Import Quotas on a Quantity-Fixing Cartel in a Two-Country-Setting
AbstractIn a static supergame context, a model is presented in which a foreign and a domestic firm form a cartel for selling a homogeneous good. In order to maximize joint cartel profit, the two firms have agreed to restrict sales to their own home market. Due to transfer costs, this market split pareto-dominates other cartel solutions. Side payments are assumed to be feasible. The introduction of an import quota may affect cartel stability as measured by a so-called critical interest rate. The two-country setting and the feasibility of side payments lead to results very different from previous findings that mild import regulations foster cartelization whereas severe restrictions destabilize quantity-setting cartels.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Justus-Liebig University Giessen, Department of Statistics and Economics in its journal Journal of Economics and Statistics.
Volume (Year): 219 (1999)
Issue (Month): 3+4 (September)
Contact details of provider:
Postal: Licher Straße 74, 35394 Gießen
Phone: +49 (0)641 99 22 001
Fax: +49 (0)641 99 22 009
Web page: http://wiwi.uni-giessen.de/home/oekonometrie/Jahrbuecher/
More information through EDIRC
Cartel stability; import quota; trade policy;
Find related papers by JEL classification:
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L4 - Industrial Organization - - Antitrust Issues and Policies
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Philipp J. H. Schröder, 2004.
"Cartel Stability and Economic Integration,"
Discussion Papers of DIW Berlin
432, DIW Berlin, German Institute for Economic Research.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peter Winker).
If references are entirely missing, you can add them using this form.