Volume and share quotas in Cournot competition

- We discuss Cournot oligopoly models with volume quotas and share quotas.
- We show the equivalence between specific taxes and volume quotas and share quotas with respect to equilibrium quantities.
- We analyze comparative statics effects of volume and share quotas.
- We apply the results to the examination of an international oligopoly model.
- The equivalence result can break down in the long run.

In this paper, we theoretically discuss volume and share quotas in the market where firms engage in Cournot competition. We show the equivalence among specific taxes, and volume quotas and share quotas with respect to equilibrium quantities. By using these results, we analyze comparative statics effects of volume and share quotas. Further, we apply the results to the examination of international oligopoly models with tariffs, import volume quotas, and import share quotas. Finally, we extend the model to endogenize the set of firms and derive a non-equivalence result of volume quotas and specific taxes.