Trade Agreements as Endogenously Incomplete Contracts

We propose a model of trade agreements in which contracting is costly, and as a consequence the optimal agreement may be incomplete. In spite of its simplicity, the model yields rich predictions on the structure of the optimal trade agreement and how this depends on the fundamentals of the contracting environment. We argue that taking contracting costs explicitly into account can help explain a number of key features of real trade agreements.

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Year of publication:	2007-01
Authors:	Horn, Henrik ; Maggi, Giovanni ; Staiger, Robert
Institutions:	C.E.P.R. Discussion Papers
Subject:	endogenously incomplete contracts \| GATT \| trade agreement \| WTO

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Extent:	application/pdf
Series:	CEPR Discussion Papers.
Type of publication:	Book / Working Paper
Notes:	Number 6037
Classification:	D86 - Economics of Contract: Theory ; F13 - Commercial Policy; Protection; Promotion; Trade Negotiations ; K33 - International Law
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005662007