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Strategic Trade Practices in the Presence of a VER

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  • Dean, Judith M
  • Gangopadhyay, Shubhashis

Abstract

The authors investigate the choice of competing exporters to move simultaneously or sequentially when a voluntary export restraint has introduced both asymmetry and uncertainty amongst them. A restrained and an unrestrained exporter choose price strategically under the threat of a voluntary export restraint on the latter. Given the choice, firms adopt a sequential move strategy, but which "leads" and which "follows" depends upon the threat of the second voluntary export restraint. The restricted firm, thus, sells its full quota, even if this threat is low. Copyright 1992 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

Suggested Citation

  • Dean, Judith M & Gangopadhyay, Shubhashis, 1992. "Strategic Trade Practices in the Presence of a VER," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 33(3), pages 645-659, August.
    • Handle: RePEc:ier:iecrev:v:33:y:1992:i:3:p:645-59
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    Cited by:

    1. Rehbein, Kathleen & Starks, Laura T., 1995. "Changes in U.S. trade policies: the wealth effects on Japanese steel firms," Japan and the World Economy, Elsevier, vol. 7(3), pages 309-327, September.

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