This paper develops a simple two-country model in which each economy consists of two sectors: a competitive non-tradable sector and an oligopolistic tradable sector. We investigate two related issues that arise in response to trade liberalization. First, we examine the linkage between trade...

Using an oligopoly model of trade with asymmetric costs, we study the individual and world welfare implications of a hub and spoke trade agreement where the hub country is more efficient than spoke countries. Under a hub and spoke trade regime, the hub country can benefit at the expense of the...

Does the presence of incomplete information affect a country's incentive to discriminate across exporters with different costs? If so, how? From a global perspective, does the presence of incomplete information weaken or strengthen the case for MFN? We examine these questions in a model of...