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Export Restraints and Horizontal Product Differentiation

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Author Info
Boccard, N. (UNIVERSITE CATHOLIQUE DE LOUVAIN, Center for Operations Research and Econometrics (CORE))
Wauthy, Xavier (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES) ; Belgian National Fund for Scientific Research (FNRS))

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Abstract

We consider the effects of export restraints on price competition in the Hotelling model of horizontal differentiation. We characterize the Nash equilibrium for all possible values of the quota and compare our results with those of Krishna (89). We show that a foreign producer would choose a VER in the vicinity of the Free Trade Equilibrium. In order to maximize domestic welfare, a government would necessarily choose complete protectionism nor Free Trade.

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Publisher Info
Paper provided by Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES) in its series Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) with number 1997024.

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Length: 19
Date of creation: 01 Jan 1997
Date of revision: 00 Sep 1997
Handle: RePEc:ctl:louvir:1997024

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Related research
Keywords: Hotelling; optimal quota; price competition;

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Find related papers by JEL classification:
D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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  1. Xavier Wauthy, 2002. "A note on Research and Development and Voluntary Export Restrictions"," Economics Bulletin, Economics Bulletin, vol. 6, pages 1-6. [Downloadable!]
  2. Hernan Vallejo, 2006. "International trade, migration and investment with horizontal product differentiation and free entry and exit of firms," REVISTA DE ECONOMÍA DEL ROSARIO, UNIVERSIDAD DEL ROSARIO - FACULTAD DE ECONOMÍA. [Downloadable!]
    Other versions:
  3. Karel Janda, 2002. "Signalling and underutilization of import quota," Journal of International Trade & Economic Development, Taylor and Francis Journals, vol. 11(4), pages 351-365, December. [Downloadable!] (restricted)
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