Sustaining free trade in repeated games without government commitment

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Title: Sustaining free trade in repeated games without government commitment
Authors: Devereux, Michael B.
Permanent link: http://hdl.handle.net/10197/1475
Date: 1990
Abstract: The paper examines how free trade can be sustained in a repeated tariff game in a simple two-country general equilibrium model. In the standard model, free trade can be sustained by "punishment strategies" with only a mild degree of forward looking behaviour on the part of governments. However, when there are short term factor market rigidities, and governments cannot precommit to an ex-ante optimal tariff, it may be much more difficult to sustain free trade. This is illustrated in two models.
Funding Details: Social Sciences and Humanities Research Council of Canada
Type of material: Working Paper
Publisher: University College Dublin. School of Economics
Series/Report no.: UCD Centre for Economic Research Working Paper Series; WP90/6
Subject LCSH: Free trade--Econometric models
Tariff
Equilibrium (Economics)
Language: en
Status of Item: Not peer reviewed
Appears in Collections:Economics Working Papers & Policy Papers

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