Trade Agreements as Endogenously Incomplete Contracts

Arbeitspapier

We propose a model of trade agreements in which contracting is costly, and as a consequence the optimal agreement may be incomplete. Inspite 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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IFN Working Paper ; No. 689

Classification and Topics

• Classification: Wirtschaft ; Economics of Contract: Theory ; Trade Policy; International Trade Organizations ; International Law
• Subject: Trade Agreement ; WTO ; GATT ; Endogenously Incomplete Contracts ; Handelsabkommen ; Vertragstheorie ; Unvollkommene Information ; Wirtschaftsmodell

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Horn, Henrik ; Maggi, Giovanni ; Staiger, Rikard W.
• Event: Veröffentlichung
• (who): Research Institute of Industrial Economics (IFN)
• (where): Stockholm
• (when): 2006

Further information

• Handle: http://hdl.handle.net/10419/81185
• Last update: 10.03.2025, 11:43 AM CET