Quotas and the Stability of Implicit Collusion

Julio Rotemberg and Garth Saloner

No 1948, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper shows that the imposition of an import quota by one country can lead to increased competitiveness; protection can reduce the price in the country that imposes the quota, the foreign country, or both. This emerges from a model in which the firms are assumed to sustain collusion by the threat of reversion to more competitive pricing. We consider both prices and quantities as the strategic variables and study competition both in the domestic and the foreign market taken individually, and in the two markets taken together.

Date: 1986-06
Note: ITI IFM
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Citations: View citations in EconPapers (7)

Published as "Tariffs Vs. Quotas with Implicit Collusion," Canadian Journal of Economics , Vol. 22, No. 2, pp. 237-244, May 1989.

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Working Paper: Quotas and the Stability of Implicit Collusion (1986)
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