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Export restraints and horizontal product differentiation

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Author Info

  • BOCCARD, Nicolas

    ()
    (Center for Operations Research and Econometrics (CORE), Université catholique de Louvain (UCL), Louvain la Neuve, Belgium)

  • WAUTHY, Xavier

    ()
    (FNRS and IRES, Université catholique de Louvain (UCL), Louvain la Neuve, Belgium)

Abstract

We consider the effects of export restraints on price competition in the Hotelling model of hor- izontal product differentiation. We characterise the Nash equilibrium for all possible values of the quota and compare our results with those of Krishna [89]. We show that a foreign pro- ducer would choose a Voluntary Export Restraint in the vicinity of the Free Trade Equilibrium. In order to maximise domestic welfare, a government would not necessarily choose complete protectionism nor free trade.

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Bibliographic Info

Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 1997082.

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Date of creation: 01 Oct 1997
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Handle: RePEc:cor:louvco:1997082

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Related research

Keywords: Hotelling; optimal quota; price competition;

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Cited by:
  1. WAUTHY, Xavier, . "A note on research and development and voluntary export restrictions," CORE Discussion Papers RP -1537, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  2. repec:ebl:ecbull:v:6:y:2002:i:1:p:1-6 is not listed on IDEAS
  3. Hernán Vallejo G, 2005. "International Trade, Migration And Investment With Horizontal Product Differentiation And Free Entry And Exit Of Firms," DOCUMENTOS CEDE 002917, UNIVERSIDAD DE LOS ANDES-CEDE.

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