When Are Voluntary Export Restraints Voluntary?: A Differential Game Approach

Kenji Fujiwara (kenjifujiwara@kwansei.ac.jp)

No 52, Discussion Paper Series from School of Economics, Kwansei Gakuin University

Abstract: We revisit voluntariness of voluntary export restraints (VERs) in a differential game model of duopoly with sticky prices. We show that a VER set at the free trade level has no effect on equilibrium under open-loop strategies while the same policy results in a smaller profit for the exporting firm, i.e. it is involuntary under a non-linear feedback strategy. Moreover, we prove an extended proposition of Dockner and Haug (1991) on voluntariness of VERs under a linear feedback strategy.

Pages: 17 pages
Date: 2010-04, Revised 2010-04
New Economics Papers: this item is included in nep-mic
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Citations: View citations in EconPapers (4)

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Related works:
Journal Article: WHEN ARE VOLUNTARY EXPORT RESTRAINTS VOLUNTARY? A DIFFERENTIAL GAME APPROACH (2010)
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