Export restraints and horizontal product differentiation

Nicolas Boccard () and Xavier Wauthy

No 1997082, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

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.

Keywords: Hotelling; optimal quota; price competition (search for similar items in EconPapers)
JEL-codes: D43 F13 L13 (search for similar items in EconPapers)
Date: 1997-10-01
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Citations: View citations in EconPapers (2)

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Working Paper: Export Restraints and Horizontal Product Differentiation (1997)
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