Why Voluntary Export Restraints Are 'Voluntary'
Harris, R.
Why Voluntary Export Restraints Are 'Voluntary' - USA : Wiley-Blackwell, 1985.
The paper presents an analysis of the effect upon an oligopolistic equilibrium of introducing a voluntary export restraint (VER) upon an importing firm. A VER set at the free trade level of imports is shown to raise the profits of all firms within the industry. The result follows as the imposition of a VER upon a free trade Nash price competition, forces the domestic firm to become an industry price leader. The VER raises industry prices by facilitating collusion and lowers consumer welfare.
Text in English
0008-4085 1540-5982 (Online)
https://doi.org/10.2307/135091
Economics
Economic analysis
Exports
Why Voluntary Export Restraints Are 'Voluntary' - USA : Wiley-Blackwell, 1985.
The paper presents an analysis of the effect upon an oligopolistic equilibrium of introducing a voluntary export restraint (VER) upon an importing firm. A VER set at the free trade level of imports is shown to raise the profits of all firms within the industry. The result follows as the imposition of a VER upon a free trade Nash price competition, forces the domestic firm to become an industry price leader. The VER raises industry prices by facilitating collusion and lowers consumer welfare.
Text in English
0008-4085 1540-5982 (Online)
https://doi.org/10.2307/135091
Economics
Economic analysis
Exports