Asymmetric free trade agreements

Vi Cao, Haifeng Fu and X. Henry Wang

Economics Letters, 2025, vol. 250, issue C

Abstract: This paper studies endogenous coalition formation among two North countries and two South countries. A North country is characterized by a larger market size and a lower unit cost of production compared to a South country. We identify the conditions under which two asymmetric free trade agreements (FTAs), each formed between a North country and a South country, can emerge as equilibrium. Such equilibria, previously not documented in the literature, may have practical implications.

Keywords: Free trade agreement; Coalition formation game; Tariff game; Strong Nash equilibrium (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0165176525001041
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:250:y:2025:i:c:s0165176525001041

DOI: 10.1016/j.econlet.2025.112267

Access Statistics for this article

Economics Letters is currently edited by Economics Letters Editorial Office

More articles in Economics Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().