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Does hidden information make trade liberalization more fragile?
Stockholm University, Faculty of Social Sciences, Department of Economics.
2011 (English)In: Canadian Journal of Economics, ISSN 0008-4085, E-ISSN 1540-5982, Vol. 44, no 2, 561-579 p.Article in journal (Refereed) Published
Abstract [en]

P>This paper focuses on the impact of hidden information on strategic interaction in the context of trade agreements. In the presence of informational asymmetry it is possible that a tradeoff between liberalization and sustainability of cooperation emerges. It is shown that it may be optimal to agree on a degree of liberalization associated with a strictly positive ex ante probability of deviation occurring. In that case, cooperation will break down in finite time, and the optimal degree of liberalization cannot be applied indefinitely.Ce memoire etudie l'impact de l'information cachee sur l'interaction strategique dans le contexte des accords de commerce. Quand il y a asymetrie de l'information, il est possible qu'emerge une relation d'equivalence entre la liberalisation et la viabilite de la cooperation. On montre qu'il peut etre optimal de s'entendre sur un degre de liberalisation associe a une probabilite ex ante strictement positive qu'une deviation va se produire. Dans ce cas, la cooperation va s'effriter dans une periode finie, et le degre optimal de liberalisation ne tient pas indefiniment.

Place, publisher, year, edition, pages
2011. Vol. 44, no 2, 561-579 p.
Keyword [en]
F13, C72, C73, D82
National Category
URN: urn:nbn:se:su:diva-68498DOI: 10.1111/j.1540-5982.2011.01644.xISI: 000290228600008OAI: diva2:473706
authorCount :1Available from: 2012-01-07 Created: 2012-01-04 Last updated: 2012-01-07Bibliographically approved

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Herzing, Mathias
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