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:	2006
Authors:	Horn, Henrik ; Maggi, Giovanni ; Staiger, Rikard W.
Publisher:	Stockholm : Research Institute of Industrial Economics (IFN)
Subject:	Handelsabkommen \| Vertragstheorie \| Unvollkommene Information \| Wirtschaftsmodell \| Trade Agreement \| WTO \| GATT \| Endogenously Incomplete Contracts

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Series:	IFN Working Paper ; 689
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	521569826 [GVK] hdl:10419/81185 [Handle] RePEc:hhs:iuiwop:0689 [RePEc]
Classification:	D86 - Economics of Contract: Theory ; F13 - Commercial Policy; Protection; Promotion; Trade Negotiations ; K33 - International Law
Source:	EconStor

Persistent link: https://www.econbiz.de/10010320067