We consider the effects of export restraints on price competition in the Hotelling model of horizontal differentiation. We characterize the Nash equilibrium for all possible values of the quota and compare our results with those of Krishna (89). We show that a foreign producer would choose a VER...

We show in a simple model of entry with sunk cost, that a regulator prefers limiting the output, orcapacity, of the incumbent firm rather than imposing a “Minimum Quality Standard” in order tohelp the entrant to provide high quality. As a by-product, our analysis makes a contribution to...