We study the implications of loss aversion for trade policy determination and show how it allows us to explain a number of important and puzzling features of trade policy. In particular, we show that if individual preferences exhibit loss aversion and the coefficient of loss aversion is large...

How do the trade impacts of a safeguard measure - which is statutorily designed to follow the most-favored-nation (MFN) principle - compare to explicitly discriminatory measures such as antidumping? We address this question empirically by examining the trade effects of the 2002 US safeguard on...