Breach, Remedies and Dispute Settlement in Trade Agreements / Giovanni Maggi, Robert W. Staiger.

Format:

Book

Author/Creator:

Maggi, Giovanni.

Contributor:

National Bureau of Economic Research.

Staiger, Robert W.

Series:

Working Paper Series (National Bureau of Economic Research) no. w15460.

NBER working paper series no. w15460

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2009.

Summary:

We provide a simple but novel model of trade agreements that highlights the role of transaction costs, renegotiation and dispute settlement. The model allows us to characterize the appropriate remedy for breach and whether the agreement should be structured as a system of "property rights" or "liability rules." We then study how the optimal rules depend on the underlying economic and contracting environment. Our model also delivers predictions about the outcome of trade disputes, and in particular about the propensity of countries to settle early versus "fighting it out."

Notes:

Print version record

October 2009.