Strategic Trade Policy Under Incomplete Information

Giovanni Maggi

Working Papers from Princeton, Woodrow Wilson School - Public and International Affairs

Abstract: This paper examines equilibrium trade policies when firms have better information than governments about the profitability of the industry. Contrary to the intuition that the policy makers' lack of information should reduce their incentives to engage in strategic trade intervention, the analysis suggests that information asymmetries may increase trade policy distortions in equilibrium, and ultimately worsen the Prisoner's Dilemma between governments.

Keywords: EXPORTS; TRADE POLICY; ASYMMETRIC INFORMATION (search for similar items in EconPapers)
JEL-codes: F13 (search for similar items in EconPapers)
Pages: 28 pages
Date: 1997
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Citations: View citations in EconPapers (1)

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Journal Article: Strategic Trade Policy under Incomplete Information (1999)
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Persistent link: https://EconPapers.repec.org/RePEc:fth:priwpu:189

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