From Inefficient Behind-The-Border Policies to Inefficient Trade Agreements: A Two-Tier Asymmetric Information Model*
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- handle: 10670/1.bc2v3y
- halshs: halshs-02973313
- doi: 10.1093/ej/ueaa085
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info:eu-repo/semantics/altIdentifier/doi/10.1093/ej/ueaa085
Mots-clés
Asymmetric Information Double-Edged Incentives Tariff Equilibrium Behind-The-Border Policies Trade Negotiations F - International Economics/F.F1 - Trade/F.F1.F13 - Trade Policy • International Trade Organizations D - Microeconomics/D.D8 - Information, Knowledge, and Uncertainty/D.D8.D82 - Asymmetric and Private Information • Mechanism DesignSujets proches
Trade Commercial trade Foreign trade Trade TradeCiter ce document
Antoine Bouët et al., « From Inefficient Behind-The-Border Policies to Inefficient Trade Agreements: A Two-Tier Asymmetric Information Model* », Archive Ouverte d'INRAE, ID : 10.1093/ej/ueaa085
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Résumé
We consider a general equilibrium model of international trade with two layers of informational asymmetries. Private information of Home producers on costs affects the design of “behind-the-border” policies reflecting the political influence of inefficient producers. Home’s supply is contracted, causing trade, and motivating the use of tariffs. Eliminating those instruments by means of a trade agreement may become impossible once Home has also private information on its redistributive concerns. Home, when subject to strong influence by inefficient producers, might be reluctant to adopt Free Trade, which may lead to limited tariff cuts and give a role for export subsidies.