Document Type

Article

Publication Date

12-2002

Publication Title

The Atlantic Economic Journal

First Page

380

Last Page

384

DOI

http://dx.doi.org/10.1007/BF02298780

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. (JEL F12, F13)

Rights

“The final publication is available at Springer via http://dx.doi.org/10.1007/BF02298780”.

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