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| Author: | Riezman, R. |
| Title: | Dynamic tariffs with asymmetric information |
| Journal: | Journal of International Economics
1991 : MAY, VOL. 30:3-4, p. 267-283 |
| Index terms: | TARIFFS INFORMATION GAME THEORY FREE TRADE TRADE RESTRICTION |
| Language: | eng |
| Abstract: | Recent developments in dynamic game theory are applied to try to better understand protection of international trade. Dynamic theories of tariffs when there is uncertainty and when protection is both observable and non-observable are analyzed. If protection is observable, free trade can be sustained over time; however, there will be periodic reversions to high tariffs. When tariffs are not observable, if countries use the correct trigger strategies, some degree of cooperation can be sustained. Periodic reversions will occur but for different reasons than in the observable case. The general conclusion is that there will be periods of high and low protection levels when countries use import trigger strategies. Some interesting extensions are shown. |
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