Game Modelling the Tokyo Round of Tariff Negotiations / Robert E. Baldwin, Richard N. Clarke.

Format:

Book

Author/Creator:

Baldwin, Robert E.

Contributor:

National Bureau of Economic Research.

Clarke, Richard N.

Series:

Working Paper Series (National Bureau of Economic Research) no. w1588.

NBER working paper series no. w1588

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1985.

Summary:

Using actual trade and tariff data for the United States and the European Community, this paper demonstrates how a trade negotiation such as the Tokyo Round, can be modelled as a game among countries attempting to minimize individual welfare loss functions. Once welfare functions are constructed, we compute both noncooperative and cooperative Nash equilibria. These welfare outcomes are then compared with those arising from the initial tariff structure, as well as the structure actually determined by the negotiation. We find that while the game model may track closely the decisions of the negotiators in the Tokyo Round, later unilateral political decisions resulted in less "optimal" tariffs.

Notes:

Print version record

March 1985.