A Theory of Managed Trade / Kyle Bagwell, Robert W. Staiger.

Format:

Book

Author/Creator:

Bagwell, Kyle.

Contributor:

National Bureau of Economic Research.

Staiger, Robert W.

Series:

Working Paper Series (National Bureau of Economic Research) no. w2756.

NBER working paper series no. w2756

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1988.

Summary:

This paper proposes a theory that predicts low levels of protection during periods of "normal" trade volume coupled with episodes of "special" protection when trade volumes surge. This dynamic pattern of protection emerges from a model in which countries choose levels of protection in a repeated game setting facing volatile trade swings. High trade volume leads to a greater incentive to unilaterally defect from cooperative tariff levels. Therefore as the volume of trade expands, the level of protection must rise in a cooperative equilibrium to mitigate the rising trade volume and hold the incentive to defect in check.

Notes:

Print version record

November 1988.