A theory of trade concessions

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dc.citation.epage504en_US
dc.citation.issueNumber3-4en_US
dc.citation.spage483en_US
dc.citation.volumeNumber42en_US
dc.contributor.authorBac, M.en_US
dc.contributor.authorRaff, H.en_US
dc.date.accessioned2015-07-28T11:56:12Z
dc.date.available2015-07-28T11:56:12Z
dc.date.issued1997en_US
dc.departmentDepartment of Economicsen_US
dc.description.abstractWe present a model of tariff disputes and concessions consisting of an infinitely repeated game under bilateral incomplete information. Given potential agreements to be reached through unilateral or reciprocal concessions, we find that an agreement involving reciprocal concessions is reached immediately if the discount factor is large and/or the volume of trade is small. Otherwise prior beliefs about country type matter: when both countries hold pessimistic priors, immediate reciprocal concessions still occur. Very different prior beliefs lead to an immediate unilateral concession of the pessimistic country, whereas optimistic priors coupled with low discount factors may generate delayed agreements. (C) 1997 Elsevier Science B.V.en_US
dc.identifier.doi10.1016/S0022-1996(96)01450-Xen_US
dc.identifier.eissn1873-0353
dc.identifier.issn0022-1996
dc.identifier.urihttp://hdl.handle.net/11693/10891
dc.language.isoEnglishen_US
dc.publisherElsevier BVen_US
dc.relation.isversionofhttp://dx.doi.org/10.1016/S0022-1996(96)01450-Xen_US
dc.source.titleJournal of International Economicsen_US
dc.subjectRepeated gameen_US
dc.subjectTariff strategyen_US
dc.subjectIncomplete informationen_US
dc.subjectDelayen_US
dc.titleA theory of trade concessionsen_US
dc.typeArticleen_US
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