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A rationale for meeting quotas asymmetrically

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  • J. Meister
  • Robert Main

Abstract

Under certain conditions, otherwise identical, competing firms may find it jointly preferable to face differing degrees of trade barriers on individual products rather than symmetric trade barriers. The key is the ability to reduce marginal production cost via research and development. The economic significance of this insight is that there could be a role for a market for quota allotments. This insight also has applications to Voluntary Export Restraints in which a priori symmetric, restricted firms may prefer to have individual production levels allocated asymmetrically. This indicates the need for detailed studies of how quotas are met by individual firms. Copyright International Atlantic Economic Society 2002

Suggested Citation

  • J. Meister & Robert Main, 2002. "A rationale for meeting quotas asymmetrically," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 30(4), pages 380-384, December.
    • Handle: RePEc:kap:atlecj:v:30:y:2002:i:4:p:380-384
    DOI: 10.1007/BF02298780
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    References listed on IDEAS

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    1. W. Salant, Stephen & Shaffer, Greg, 1998. "Optimal asymmetric strategies in research joint ventures," International Journal of Industrial Organization, Elsevier, vol. 16(2), pages 195-208, March.
    2. Bergstrom, Theodore C. & Varian, Hal R., 1985. "Two remarks on Cournot equilibria," Economics Letters, Elsevier, vol. 19(1), pages 5-8.
    3. Barbara J. Spencer & James A. Brander, 1983. "International R & D Rivalry and Industrial Strategy," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 50(4), pages 707-722.
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