This paper presents a theory of dynamic trade agreements in which external institutions, such as the WTO, play a central role in supporting credible enforcement. In our model, countries engage in ongoing negotiations, and, as a consequence, cooperative agreements become unsustainable in the...

This paper examines a contractual settingwith unverifiable investment and a durable trading opportunity, in which trade can take place in any one of an infinite number of periods. The contractual setting features cross-investment, meaning that the seller’s investment affects the...

This paper examines a class of contractual relationships with specific investment, a non-durable trading opportunity, and renegotiation. FurtheringWatson’s (2007) line of analysis, trade actions are modeled as individual and trade-action-based option contracts are explored. Simple tools...

This paper develops a theoretical framework for studying contract and enforcement in settings with nondurable trading opportunities and complete but unverifiable information. The framework explicitly accounts for the parties’ individual trade actions. The sets of implementable...

Motivated by evidence on the importance of incomplete information and networks in international trade, we investigate the supply of "network intermediation." We hypothesize that the agents who become international trade intermediaries first accumulate networks of foreign contacts while working...