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Voluntary Export Restraints under Imperfect Competition
Author(s) -
Okawa Masayuki
Publication year - 2004
Publication title -
review of international economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.513
H-Index - 58
eISSN - 1467-9396
pISSN - 0965-7576
DOI - 10.1111/j.1467-9396.2004.00436.x
Subject(s) - cournot competition , economics , duopoly , imperfect competition , microeconomics , marginal cost , homogeneous , price elasticity of demand , welfare , bertrand competition , constant (computer programming) , strategic complements , elasticity (physics) , competition (biology) , imperfect , oligopoly , market economy , ecology , linguistics , philosophy , physics , materials science , biology , computer science , programming language , composite material , thermodynamics
The paper studies the effects of a change in the level of voluntary export restraints (VERs) on the behavior of the domestic firm and on the welfare of the importing country. The author constructs a simple two‐country Cournot duopoly model in which each firm produces a homogeneous good at constant marginal cost. It is shown that the results obtained by predecessors based on linear demand, constant‐elasticity demand, strategic substitutes and so forth all emerge as special cases.