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Export Restraints and Horizontal Product Differentiation

Author

Listed:
  • 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))

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.

Suggested Citation

  • Boccard, N. & Wauthy, Xavier, 1997. "Export Restraints and Horizontal Product Differentiation," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 1997024, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES), revised 00 Sep 1997.
  • Handle: RePEc:ctl:louvir:1997024
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    File URL: http://sites.uclouvain.be/econ/DP/IRES/9724.pdf
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    Cited by:

    1. 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.
    2. Xavier Wauthy, 2002. "A note on Research and Development and Voluntary Export Restrictions"," Economics Bulletin, AccessEcon, vol. 6(1), pages 1-6.
    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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