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Trade Agreements as Endogenously Incomplete Contracts

Henrik Horn (), Giovanni Maggi and Robert Staiger ()

American Economic Review, 2010, vol. 100, issue 1, 394-419

Abstract: We propose a model of trade agreements in which contracting is costly, and as a consequence the optimal agreement may be incomplete. In spite of its simplicity, the model yields rich predictions on the structure of the optimal trade agreement and how this depends on the fundamentals of the contracting environment. We argue that taking contracting costs explicitly into account can help explain a number of key features of real trade agreements. (JEL D86, F13)

JEL-codes: D86 F13 (search for similar items in EconPapers)
Date: 2010
Note: DOI: 10.1257/aer.100.1.394
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Working Paper: Trade Agreements as Endogenously Incomplete Contracts (2007) Downloads
Working Paper: Trade Agreements as Endogenously Incomplete Contracts (2007) Downloads
Working Paper: Trade Agreements as Endogenously Incomplete Contracts (2006) Downloads
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