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Export restraints and horizontal product differentiation

Author

Listed:
  • 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.

Suggested Citation

  • BOCCARD, Nicolas & WAUTHY, Xavier, 1997. "Export restraints and horizontal product differentiation," CORE Discussion Papers 1997082, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvco:1997082
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    File URL: https://uclouvain.be/en/research-institutes/immaq/core/dp-1997.html
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    Cited by:

    1. Xavier Wauthy, 2002. "A note on Research and Development and Voluntary Export Restrictions"," Economics Bulletin, AccessEcon, vol. 6(1), pages 1-6.
    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, November.
    3. repec:ebl:ecbull:v:6:y:2002:i:1:p:1-6 is not listed on IDEAS

    More about this item

    Keywords

    Hotelling; optimal quota; price competition;

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - 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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