Quantitative restrictions in the presence of cost-based informational asymmetries

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Date: Apr. 1999
From: Southern Economic Journal(Vol. 65, Issue 4)
Publisher: Southern Economic Association
Document Type: Article
Length: 7,071 words

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Abstract :

A cost-based information asymmetry is introduced into a model where a domestic company's behavior in the first period influences the entry decision of a foreign company in the second period. The consequences of import quota policy within this environment were studied and contrasted with the standard, full-information effects. When quota quantities are established exogenously, the standard influences of quota policy may be substantially changed depending on whether or not policy encourages the domestic company to signal cost structure.

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Gale Document Number: GALE|A54545859