This paper presents a model of a market for an internationally traded good. Buyers, who are customers of one firms, are imperfectly informed about other firms' prices and it is costly for them to change from one supplier to another. This leads to dynamic market share equations, which allow analysis of the interaction between price/quantity decisions of exporting and import competing firms. The model generates results which are consistent with empirical findings.
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Nils Gottfries (1986) studied this question.
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