EconPapers    
Economics at your fingertips  
 

Voluntary Export Restraints in a Trade Model with Sticky Price: Linear and Nonlinear Feedback Solutions

Luca Lambertini () and Arsen Palestini ()
Additional contact information
Arsen Palestini: University of Rome “La Sapienza”

Dynamic Games and Applications, 2018, vol. 8, issue 3, 507-518

Abstract: Abstract We revisit the adoption of voluntary export restraints (VERS) in the differential Cournot game with sticky price and intraindustry trade by Dockner and Haug (Can J Econ 3:679–685, 1991). The analysis relies on linear and nonlinear feedback strategies, to encompass the special cases considered in Fujiwara (Aust Econ Pap 49:101–110, 2010). We show that a VER may arise in correspondence of any free trade equilibrium generated by feedback information, when the intensity of competition is at least as strong as under open-loop information. The adoption of a VER by a foreign firm also benefits the domestic firm, yielding an outcome which has a definite collusive flavour. The foreign firm’s incentive to adopt the VER can be interpreted in the light of the dynamic formulation of conjectural variations due to Dockner (J Ind Econ 40:377–395, 2010).

Keywords: Differential games; Intraindustry trade; VER; Conjectural variations (search for similar items in EconPapers)
JEL-codes: C73 D43 F12 L13 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://link.springer.com/10.1007/s13235-018-0251-0 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
Working Paper: Voluntary Export Restraints in a Trade Model with Sticky Price: Linear and Nonlinear Feedback Solutions (2017) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:dyngam:v:8:y:2018:i:3:d:10.1007_s13235-018-0251-0

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/13235

Access Statistics for this article

Dynamic Games and Applications is currently edited by Georges Zaccour

More articles in Dynamic Games and Applications from Springer
Bibliographic data for series maintained by Sonal Shukla ().

 
Page updated 2019-12-02
Handle: RePEc:spr:dyngam:v:8:y:2018:i:3:d:10.1007_s13235-018-0251-0