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Voluntary Import Expansions and Voluntary Export Restraints in an Oligopoly Model with Capacity Constraints

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  • Neil Bjorksten

Abstract

In a three-country generalization of the Kreps-Scheinkman (1983) duopoly model with price competition and capacity constraints, the author analyzes the effects of discriminatory voluntary import expansions and voluntary export restraints on equilibrium capacity and pricing decisions. Voluntary export restraints are shown to be bad for the exporting country, contradicting recent results in the literature by R. Harris (1985) and K. Krishna (1989). Voluntary import expansions are shown to decrease competition. Cases are analyzed where voluntary import expansions may actually lead to import contraction or to increases in efficiency in the home country.

Suggested Citation

  • Neil Bjorksten, 1994. "Voluntary Import Expansions and Voluntary Export Restraints in an Oligopoly Model with Capacity Constraints," Canadian Journal of Economics, Canadian Economics Association, vol. 27(2), pages 446-457, May.
    • Handle: RePEc:cje:issued:v:27:y:1994:i:2:p:446-57
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    Citations

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    Cited by:

    1. Krishna, Kala & Roy, Suddhasatwa & Thursby, Marie, 1998. "Implementing Market Access," Review of International Economics, Wiley Blackwell, vol. 6(4), pages 529-544, November.
      • Krishna, K & Thursby, M & Roy, S, 1996. "Implementing Market Access," Papers 96-011, Purdue University, Krannert School of Management - Center for International Business Education and Research (CIBER).
      • Krishna, K & Roy, S & Thursby, M, 1996. "Implementaing Market Access," Papers 96-003, Purdue University, Krannert School of Management - Center for International Business Education and Research (CIBER).
      • Kala Krishna & Suddhasatwa Roy & Marie Thursby, 1996. "Implementing Market Access," NBER Working Papers 5593, National Bureau of Economic Research, Inc.
    2. repec:zbw:bofitp:2022_001 is not listed on IDEAS
    3. García Díaz, Antón, 1998. "List princing and pure strategy outcomes in a bertrand edgeworth duopoly," UC3M Working papers. Economics 6089, Universidad Carlos III de Madrid. Departamento de Economía.
    4. Greaney, Theresa M., 1999. "Manipulating market shares: The indirect effects of voluntary import expansions (VIEs)," Japan and the World Economy, Elsevier, vol. 11(1), pages 95-113, January.
    5. Baylis, Katherine R., 2003. "Dispatches From The Tomato Wars: Spillover Effects Of Trade Barriers," Working Papers 15850, University of British Columbia, Food and Resource Economics.
    6. Luca Lambertini & Arsen Palestini, 2018. "Voluntary Export Restraints in a Trade Model with Sticky Price: Linear and Nonlinear Feedback Solutions," Dynamic Games and Applications, Springer, vol. 8(3), pages 507-518, September.
    7. Michael Funke & Adrian Wende, 2021. "The US-China Phase One Trade Deal: An Economic Analysis of the Managed Trade Agreement," CESifo Working Paper Series 8945, CESifo.
    8. Qiu, Larry D. & Spencer, Barbara J., 2002. "Keiretsu and relationship-specific investment: implications for market-opening trade policy," Journal of International Economics, Elsevier, vol. 58(1), pages 49-79, October.
    9. Michael Funke & Adrian Wende, 2023. "The US–China Phase One trade deal: An economic analysis of the managed trade agreement," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 56(2), pages 758-786, May.
    10. Xiaopeng Yin, 2004. "Voluntary import expansions with non‐stationary demand," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 37(4), pages 1084-1096, November.

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