Import Quotas and Entry Deterrence

Neil Campbell

Australian Economic Papers, 2000, vol. 39, issue 2, 152-158

Abstract: Using a simple version of the Milgrom and Roberts entry deterrence model, it is shown that adjusting a quota so that a greater volume of imports is allowed, can facilitate entry into the domestic industry. That is, the easing of a quota, can cause the domestic incumbent to shift from deterring entry to accommodating entry.

Date: 2000
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