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. Inspite 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:	2007-01-03
Authors:	Horn, Henrik ; Maggi, Giovanni ; Staiger, Rikard W.
Institutions:	Institutet för Näringslivsforskning (IFN)
Subject:	Trade Agreement \| WTO \| GATT \| Endogenously Incomplete Contracts

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Extent:	application/pdf
Series:	Working Paper Series.
Type of publication:	Book / Working Paper
Language:	English
Notes:	The text is part of a series Working Paper Series Number 689 50 pages
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/10005771085