trade restrictiveness indices in the presence of externalities an application to non tariff measures we extend the trade restrictiveness index approach to the case of market imperfections and domestic regulations addressing them we focus on standard like non tariff measures ntms affecting cost of production and potentially enhancing demand by reducing negative externalities we apply the framework to the database of kee et al 2009 and derive ad valorem equivalents aves for technical measures about 39 of the product lines affected by ntms exhibit negative aves indicating a net trade facilitating effect of these measures accounting for these effects significantly reduces previous measures of countries trade policy restrictiveness obtained while constraining these ntms to be trade reducing

globalization labor markets and policy backlash in the past the late nineteenth and twentieth centuries have many things in common both periods recorded fast growth convergence and labor market integration between oecd members both periods witnessed intense debate about who gained and who lost from globalization furthermore the earlier period saw a retreat from global liberalism long before the interwar deglobalization disaster did globalization of that time plant seeds of its own destruction are there lessons for the present

tariff and quota reform with international capital mobility in a small open economy with a convex production set international capital mobility raises the cost of tariff protection on one subset of imports if there are irremovable quotas on another given irremovable quotas on one subset of imports free trade is the optimal policy toward all other imports with or without international capital mobility further in the scalar case international capital mobility reduces the optimal implicit excess tariff on the quota constrained import if an irremovable tariff is in place on the other import

the regionalism debate an overview the following sections are included introductiondefinitionswto provisions for ptashistorical evolutioneffects on union membersvinerian analysis welfare effects of a tariff preferencetransport costs and ptasrules of origin in ftasnon traditional gains guaranteed market access shelter from contingent protection locking in the reforms and dispute settlementimplications for the global trading systemcan pta expansion lead to global free trade do ptas make multilateral liberalization less likely do ptas lead to a rise in trade barriers against nonmembers the spaghetti bowl phenomenonwto illegal policies in ptasopen regionalism deep integrationconclusions minimizing the adverse effects of ptasreferences this abstract was borrowed from another version of this item

pro poor trade policy in sub saharan africa abstract this paper examines the presence of a pro poor bias in the existing structure of protection of six sub saharan african ssa countries burkina faso cameroon cote d ivoire ethiopia gambia and madagascar we build on a simple agricultural household production model and we propose an extension to include adjustments in labor income our approach which can be implemented without repeated cross sections of household level data suits well the data constraints in ssa it also allows us to capture the heterogeneity in trade protection at the tariff line level the pro poor bias indicators suggest that ssa s trade policies tend to be biased in favor of poor households as these policies redistribute income from rich to poor households this is because protection increases the agricultural prices of goods that are sold by african households and this effect dominates both the impacts of higher consumption prices and the strong stolper samuelson effects that benefit skilled over unskilled workers

is the wto passe the wto has delivered policy outcomes that are very different from those likely to emerge out of the recent wave of preferential trade agreements ptas should economists see this as an efficient institutional hand off where the wto has carried trade liberalization as far as it can manage and is now passing the baton to ptas to finish the job this paper surveys a growing economics literature on international trade agreements and argues on this basis that the wto is not passe rather and subject to some caveats this survey of research to date suggests that the wto warrants strong support while a more cautious view of ptas seems appropriate

trade creation and diversion revisited accounting for model uncertainty and natural trading partner effects summary the effect of preferential trade agreements ptas on trade flows is subject to model uncertainty stemming from the diverse and even contradictory effects suggested by the theoretical pta literature the existing empirical literature has produced remarkably disparate results and the wide variety of empirical approaches reflects the uncertainty about the correct set of explanatory variables that ought to be included in the analysis to account for the model uncertainty that surrounds the validity of the competing pta theories we introduce bayesian model averaging bma to the pta literature statistical theory shows that bma successfully incorporates model uncertainty in linear regression analysis by minimizing the mean squared error and by generating predictive distributions with optimal predictive performance once model uncertainty is addressed as part of the empirical strategy we find strong evidence of trade creation trade diversion and open bloc effects our results are robust to a range of alternative empirical specifications proposed by the recent pta literature copyright 2010 john wiley sons ltd

the free trade epidemic of the 1860s and other outbreaks of economic discrimination why was there an abrupt increase in economic openness in europe in the 1860s this increase may have been the result of a contagion process in which the cobden chevalier treaty between britain and france threatened to displace third party exports to fra nce with british exports as a result most european states signed similar treaties with france which had further ripple effects this article outlines a formal model of this process based on the assumption that an agreement between two states incre ases the desirability of similar treaties to third parties propositions regarding the rate and pattern of spread of treaties are derived from this model this article then discusses the insights these propositions may offer into the rise and fall of the most favored nation network of treaties between 1860 and 1929 at a theoretical level the model aims to link the microlevel processes underlying state preferences to system level phenomena at a substantive level this analysis offers insight into the current explosion of regionalism

politically realistic objective functions and trade policy profs and tariffs abstract this paper demonstrates a mathematical correspondence between the deus ex machina tariff formation approach and political economy approach the correspondence implies that the tariff chosen by lobbying influenced policy makers will be equivalent to a tariff chosen by a deus ex machina government that gives too much weight to profits this result allows many political economy issues to be addressed in the simple framework of a deus ex machina government which faces a politically realistic objective function prof

optimum tariffs and retaliation how country numbers matter abstract this paper identifies a new terms of trade externality that is exercised through tariff setting a north south model of international trade is introduced in which the number of countries in each region can be varied as the number of countries in one region is increased each government there competes more aggressively with the others in its region by lowering its tariff to attract imports from the other region in doing so all countries in a region exert a negative terms of trade externality on each other collectively undermining their own terms of trade and welfare this externality can increase efficiency if the numbers of countries in both regions are increased simultaneously

auction theory with private values for many centuries auctions have been a common form of selling procedure although auction methods vary across country and product the two most frequently observed are the open ascending bid or english auction and the sealed bid auction recent theoretical research has led to a theory of equilibrium bidding in these two auctions and a wide range of alternatives as well as a result it has been possible to compare the revenue extracted by the seller under different auction methods and even to characterize the revenue maximizing auction the revenue equivalence theorem see for example william vickrey 1961 roger myerson 1981 and riley and william samuelson 1981 asserts that when each bidder s reservation price for a unit of an indivisible good is an independent draw from the same distribution and bidders are risk neutral the sealed bid auction generates the same expected revenue as the open auction much recent research has involved weakening each of the main hypotheses risk neutrality identically distributed values and independence of values in turn we shall illustrate some of the principal conclusions of this work by considering the properties of open and sealed bid auctions in a model of two bidders whose reservation prices can assume only two values and by comparing these auctions to the optimal or revenuemaximizing auction i revenue equivalence

international trade and unemployment theory and cross national evidence abstract we present a model of trade and search induced unemployment where trade results from heckscher ohlin h o and or ricardian comparative advantage using cross country data on trade policy unemployment and various controls and controlling for endogeneity and measurement error problems we find fairly strong and robust evidence for the ricardian prediction that unemployment and trade openness are negatively related this effect dominates the positive h o effect of trade openness on unemployment for capital abundant countries which turns negative for labor abundant countries using panel data we find an unemployment increasing short run impact of trade liberalization followed by an unemployment reducing effect leading to the new steady state

measuring protection a cautionary tale abstract this paper comments on a theoretically based index of protection recently developed by anderson and neary the index must be calculated within the context of a specific cge model anderson and neary propose a generic model and have found that the index is robust to changes in the elasticities embedded within that model is the index also robust to changes in the specification of the model the paper identifies one historical instance where the index is extremely sensitive to the specification of the model s demand side there are important methodological lessons to be learnt from this example

the optimal tariff structure in higher dimensions this paper generalizes to higher dimensions the two good result that the optimal trade policy for a large country is an import tariff a weak form of the optimal tariff requiring that an import export good be most least protected holds under gross substitutability sufficient conditions are obtained for a strong form of the optimal tariff which requires that all imports be more protected than any export and also for the trade tax revenue to be nonnegative in the optimal policy copyright 1990 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

preferential trade agreements and antidumping protection abstract are preferential trade agreements ptas stumbling blocks or building blocks towards multilateral trade liberalization we address this question by investigating the effects of the negotiation and implementation of ptas on the use of antidumping ad i e the most common form of contingent trade protection by member countries against non members as there has been a concurrent surge in regionalism and ad activity since the 1990s theoretically derived empirical predictions are supported by the empirical analysis based on the 15 most intense users of ad the results demonstrate that both the negotiation and the implementation of ptas lead to fewer ad measures against non member countries except for members of customs union agreements in force facing large import surges from non members thus our results highlight a building block effect of ptas on multilateral trade cooperation when it comes to ad protection

the uruguay round and welfare in some distorted agricultural economies abstract the uruguay round s induced changes in world agricultural prices will affect the welfare of developing countries the standard terms of trade effect calculation can mislead since the distortion effect operates alongside the terms of trade effect this study of the uruguay round s impact on nine agricultural economies reveals distortion effects which are many times larger than terms of trade effects in three of nine cases the distortion effect reverses the impact of the terms of trade effect in two other cases the distortion effect raises trivial terms of trade effect up to around 1 of national income

multilateral tariff cooperation during the formation of customs unions abstract we study the implications of customs union formation for multilateral tariff cooperation we model cooperation in multilateral trade policy as self enforcing in that it involves balancing the current gains from deviating unilaterally from an agreed upon trade policy against the future losses from forfeiting the benefits of multilateral cooperation that such a unilateral defection would imply the early stages of the process of customs union formation are shown to alter this dynamic incentive constraint in a way that leads to a temporary honeymoon for liberal multilateral trade policies we find however that the harmony between customs unions and multilateral liberalization is temporary eventually as the full impact of the emerging customs union becomes felt a less favorable balance between current and future conditions re emerges and the liberal multilateral policies of the honeymoon phase cannot be sustained

the generalized war of attrition abstract we model a war of attrition with n k firms competing for n prizes in a natural oligopoly context the k 1 lowest value firms drop out instantaneously even though each firm s value is private information to itself in a standard setting context in which every competitor suffers losses until a standard is chosen even after giving up on its own preferred alternative each firm s exit time is independent both of k and of other players actions our results explain how long it takes to form a winning coalition in politics solving the model is facilitated by the revenue equivalence theorem jel d43 d44 l13 o30

negotiating free trade we develop a dynamic bargaining model in which a leading country endogenously decides whether to sequentially negotiate free trade agreements with subsets of countries or engage in simultaneous multilateral bargaining with all countries at once we show how the structure of coalition externalities shapes the choice between sequential and multilateral bargaining and we identify circumstances in which the grand coalition is the equilibrium outcome leading to worldwide free trade a model of international trade is then used to illustrate equilibrium outcomes and how they depend on the structure of trade and protection global free trade is not achieved when the political economy motive for protection is sufficiently large furthermore the model generates both building bloc and stumbling bloc effects of preferential trade agreements in particular we describe an equilibrium in which global free trade is attained only when preferential trade agreements are permitted to form a building bloc effect and an equilibrium in which global free trade is attained only when preferential trade agreements are forbidden a stumbling bloc effect the analysis identifies conditions under which each of these outcomes emerges

an analysis of the war of attrition and the all pay auction we study the war of attrition and the all pay auction when players signals are affiliated and symmetrically distributed we a find sufficient conditions for the existence of symmetric monotonic equilibrium bidding strategies and b examine the performance of these auction forms in terms of the expected revenue accruing to the seller under our conditions the war of attrition raises greater expected revenue than all other known sealed bid auction forms journal of economic literature classification numbers d44 d82 1997 academic press

is protectionism on the rise assessing national trade policies during the crisis of 2008 to understand the role of trade policies in the crisis of 2008 this paper constructs the overall trade restrictiveness indices for a wide range of countries using their tariff schedules in 2008 and 2009 the index summarizes the trade policy stance of a country taking into account the share of each good in trade as well as its corresponding import demand elasticity results show that there is no widespread increase in protectionism via tariff policies since the global financial crisis has unfolded while many countries have adjusted tariffs upward on selected products only a handful of countries such as malawi russia argentina turkey and china focus on products that have significant impacts on trade flows the united states and the european union by contrast rely mainly on anti dumping duties to shield domestic industries overall while the rise in tariffs and anti dumping duties in these countries may have jointly caused global trade to drop by as much as us 43 billion during the crisis period it explains less than 2 percent of the collapse in world trade

two bidder all pay auctions with interdependent valuations including the highly competitive case abstract we analyze symmetric two bidder all pay auctions with interdependent valuations and discrete type spaces relaxing previous restrictions on the distribution of types and the valuation structure we present a construction that characterizes all symmetric equilibria we show how the search problem this construction faces can be complex in equilibrium randomization can take place over disjoint intervals of bids equilibrium supports can have a rich structure and non monotonicity of the equilibrium may result in a positive probability of allocative inefficiency when the value of the prize is not common particular attention is paid to the case in which an increase in a bidder s posterior expected value of winning the auction is likely to be accompanied by a corresponding increase for the other bidder such environments are highly competitive in the sense that the bidder s higher valuation also signals that the other bidder has an incentive to bid aggressively

do big countries win tariff wars yes it is widely believed that tariffs invite retaliation and that the postretaliation equilibrium l eaves all countries worse off than they would be at free trade the a uthors present a simple pure exchange model with two countries and t wo goods and show which endowment patterns are consistent with this belief they find that if one country is substantially bigger than th e other it can expect to gain from a tariff war despite retaliation the model can be extended to show that the advantage obtained by bei ng part of a large trading unit can help explain the formation of cus toms unions copyright 1988 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

comparative statics in a simple class of strategic market games this paper investigates the effects of entry in two sided markets where buyers and sellers act strategically applying new tools from supermodular optimization games sufficient conditions for different comparative statics results are obtained while normality of one good is sufficient for the equilibrium price to be increasing in the number of buyers normality of both goods is required for equilibrium bids and sellers equilibrium utilities to be increasing in the number of buyers when the economy is replicated normality of both goods and gross substitutes guarantee that the equilibrium of the strategic market game converges monotonically in quantities to the competitive equilibrium simple counter examples are provided to settle other potential conjectures of interest c 2007 elsevier inc all rights reserved

optimal tariff equilibria with customs unions the authors construct a model of customs unions in which countries charge optimal tariffs customs unions internalize the externality that exists whenever two countries import the same good also customs unions make several countries into one large unit with more market power big customs unions can improve their members welfare relative to the free trade the authors model of customs unions separates the effects of tariff reduction from the effects of policy coordination the movement from nash equilibrium to a free trade association improves global resource allocations moving from a free trade association to a full customs union has ambiguous resource allocation effects

asymmetric contests with conditional investments rent seeking scenarios competitions for promotions and research and development r d races are examples of competitions in which participants expend resources regardless of whether they win or lose although similar in their all pay feature such competitions often differ in important dimensions these include the type of technologies employed in competition the type of asymmetries among competitors the degree to which expenditures are sunk and the number of prizes consider lobbying settings in which firms expend resources in order to influence a policymaker if expenditures take the form of monetary outlays and all firms have the same cost of capital then it is reasonable to think of firms marginal cost of influence as linear but if a firm has a reputational advantage and high costs of capital its lobbying technology may be more reasonably thought of as having convex costs relatively low marginal costs up to a moderate level of influence due to the reputational advantage and relatively high marginal costs at higher levels of influence due to the high costs of capital similarly the lobbying technology of a firm that is relatively unknown and has low costs of capital may be characterized by concave costs lobbying restrictions geographic location or preferential treatment by the policymaker further impact firms lobbying technologies inducing additional nonlinearities and asymmetries among firms in some lobbying settings firms also commit to expenditures conditional on a favorable outcome for example a firm may commit to building factories and creating new jobs if it is granted one of a limited number of manufacturing licenses thus the specification of firms lobbying technologies the type of asymmetries among firms the combination of unconditional and conditional investments and the number of eventual winners may change according to the lobbying setting studied the same is true for other competitions with an all pay feature in a competition for promotions workers often differ in their abilities experience and social skills more than one prize

bilateralism and free trade we study a setting with many countries in each country there are firms that can sell in the domestic as well as foreign markets countries can sign bilateral free trade agreements that lower import tariffs and thereby facilitate trade we allow a country to sign any number of bilateral free trade agreements a profile of free trade agreements defines the trading regime our principal finding is that in symmetric settings bilateralism is consistent with global free trade we also explore the effects of asymmetries across countries and political economy considerations on the incentives to form trade agreements

non existence of monotone equilibria in games with correlated signals abstract participation in economic games such as auctions is typically costly which means that players potential bidders must consider whether to participate such decisions may be no less crucial than how to bid and yet the literature has been mostly concerned with bidding assuming an exogenously given number of bidders see krishna auction theory academic press new york 2002 landsberger and tsirelson correlated signals against monotone equilibria preprint ssrn 222308 social science research network electronic library may 2000 available online http papers ssrn com abstract 222308 have shown that fundamental results established in symmetric auction theory with correlated signals such as the existence of a monotone equilibrium may not hold if participation decisions are part of equilibrium the major goal of this paper is to illustrate and explain this result that may be considered counter intuitive given the emphasis placed on monotone equilibria in the auction literature

can trade costs explain why exchange rate volatility does not feed into consumer prices abstract if countries specialize in imperfectly substitutable goods trade costs increase the share of expenditure devoted to domestic output reducing the exposure of consumer price inflation to exchange rate changes i present a multi country flexible price model where expenditure shares are inversely related to trade costs through a gravity equation in this setting consumer price inflation can be approximated as an expenditure share weighted average of the contributions to inflation from all countries i use data from 24 oecd countries 1970 2003 to estimate a structural gravity model i combine the fitted expenditure shares from the estimation with actual data on exchange rates to construct predictions of inflation the behavior of these predictions indicates that trade costs can explain both qualitatively and quantitatively the failure of exchange rate volatility to feed into inflation

customs unions and the core abstract customs union formation is modeled as a two stage game in the first stage countries make coalitional choices according to core theory in the second stage optimal tariffs are determined this yields a theory that predicts which customs unions form an example shows that a customs union can be an equilibrium even when both member countries do better at free trade

general equilibrium analysis of price controls a computational approach this paper presents a computational general equilibrium framework for evaluating the welfare costs associated with economy wide price controls other than traditional commodity specific partial equilibrium analyses most empirical literature on price controls concentrates on macroeconomic issues such as the impact on inflation and unemployment here we seek to reorient empirical literature on the effects of these controls towards efficiency losses from resource misallocation by providing a framework which can be used to address the issue of how large these economic inefficiencies are and who gains and who loses from them in this paper we present a general equilibrium computational framework for evaluating the welfare costs associated with economy wide price controls price controls have been employed by governments all over the world during war and peace in response to all manners of threats both real and imaginary and in all ages 2 other than traditional commodity specific partial equilibrium analyses most empirical literature on price controls concentrates on macroeconomic issues such as the impact on inflation and unemployment despite the fact that the main attack on price controls is usually in terms of their efficiency losses from resource misallocation here we seek to reorient the empirical literature on the effects of the controls by providing a framework which can be used to address the issue of how large these economic inefficiencies are and who gains and who loses from them we use a general equilibrium model in which the equilibrium mechanism in the presence of price controls is endogenously determined search costs these yield additional welfare losses under price controls beyond those associated with more traditional tax or tariff models the argument is that in an economy with price controls the greater the difference between controlled and market clearing prices the costlier it is for buyers and sellers to find each other and transact a similar approach has been taken recently in two other papers in which we have been involved see nguyen 1985 nguyen and whalley 1986 the difference here is that unlike these earlier papers we explicitly incorporate production and apply our approach to the issue of economy wide controls using data for an actual economy since either the buying or selling side of a price controlled market can be

tariffs and growth in the late 19th century the paper estimates the correlation between tariffs and economic growth in the late 19th century in the context of three types of growth equation unconditional convergence equations conditional convergence equations and factor accumulation models it does so for a panel of ten countries between 1875 and 1914 tariffs were positively correlated with growth in these countries during this period economic theory is ambiguous as regards the relationship between trade policy and growth the growth literature of the past decade has produced an impressive array of models in which protection can either increase or reduce long run growth rates grossman and helpman 1991 rivera batiz and romer 1991 stokey 1991 young 1991 such theoretical ambiguity invites empirical research while new growth theory is ambiguous on the subject the new empirical growth literature has produced a consensus that free trade is positively associated with growth based on evidence from the late 20th century but see rodrlguez and rodrik 1999 for a sceptical review of the literature the clear

tariff structure trade expansion and canadian protectionism 1870 1910 canada s trade policy at the end of the 19th century is commonly viewed as protectionist and extremely costly in this paper we employ the anderson neary trade restrictiveness index to re examine this view based on product level customs data we show that canadian trade policy between 1870 and 1910 was more restrictive than previously understood but created smaller welfare losses than previously believed these results are primarily driven by high tariffs on inelastic non competing import goods although canada s tariff structure becomes more restrictive over the period our findings indicate it was not as protectionist or as costly as once thought structure tarifaire expansion du commerce et protectionnisme canadien entre 1870 et 1910 la politique commerciale canadienne a la fin du 19e siecle est habituellement consideree comme protectionniste et extremement couteuse dans ce memoire on emploie l indice de restriction du commerce de anderson neary pour reexaminer ce point de vue a partir de donnees du service des douanes au niveau du produit on montre que la politique commerciale canadienne entre 1870 et 1910 a ete plus restrictive que ce qu on avait pense autrefois mais qu elle a cree des pertes de bien etre moindres que ce qu on avait cru anterieurement ces resultats sont d abord engendres par des droits de douanes eleves sur des biens d importation qui ne concurrencent pas les biens domestiques et dont la demande est inelastique meme si la structure tarifaire du canada devient plus restrictive au cours de cette periode les resultats montrent qu elle n est ni aussi protectionniste ni aussi couteuse qu on l a deja pense

multilateral tariff cooperation during the formation of free trade areas we consider the impact of the formation of free trade agreements on multilateral tariff cooperation we assume that countries are limited to selfenforcing multilateral arrangements that balance the gains from deviating against the costs of an ensuing trade war we find that the emergence of free trade areas will be accompanied by a temporary retreat from liberal multilateral trade policies as the initial balance supporting multilateral cooperation is upset eventually however as the full impact of the emerging free trade agreement on multilateral trade patterns is felt this initial balance tends to reemerge and liberal multilateral trade policies can be restored

a theory of trade policy leadership abstract this paper constructs a two country model of bilateral trade negotiations in the presence of political uncertainty to demonstrate that unilateral trade liberalization may be an optimal policy for a large country the political uncertainty is due to producer opposition to trade agreement ratification in the foreign country unilateral liberalization by the home country has a salutary effect on negotiations because it mitigates the pain of potential ratification failure on the foreign country it also promotes foreign ratification because it effectively punishes foreign import competing producers for lobbying against an agreement these benefits are shown to outweigh up to a point the terms of trade cost that the home country must suffer when it actually liberalizes unilaterally in equilibrium therefore we see a pattern in which the home country unilaterally liberalizes for several periods until ratification in the foreign country succeeds at which point foreign country finally reciprocates we also demonstrate that contrary to the standard optimal tariff result there may be an inverse relationship between the home country s monopoly power and its optimal unilateral tariff

illegal aliens unemployment and immigration policy abstract this paper develops a simple two country model of illegal immigration in an attempt to examine the interaction among variables such as the stock of migrant labor the unemployment rates of the two economies and the rate of spending by the host country on the enforcement of its immigration restrictions the focus of the analysis is on the dynamics of immigration policy and on its role in determining the nature of the mechanism by which disturbances to the labor market of one country are transmitted to that of the other in the short run and in the long run

multilateralism and the endogenous formation of preferential trade agreements abstract this paper examines the interaction between preferential trade agreements ptas and multilateral tariff reduction in a model of imperfect competition a growing literature finds that the formation of ptas alters the incentives for and the sustainability of multilateral tariff reduction we show that the causation is not one sided multilateral tariff reduction also affects the formation of ptas specifically tariff reduction enhances the incentives to form a pta and increases the likelihood that it is self enforcing thus each round of multilateral tariff reduction should lead to a new wave of ptas this may help to explain the current trend towards regionalism

can bilateral trade agreements help induce free trade there has been growing debate about whether bilateral trade agreements are damaging multilateral efforts to eliminate barriers to international trade this paper develops a model in which trading blocs always charge optimal tariffs and make trade agreements based on strategic considerations we ask a very simple question does the fact that trading blocs can form bilateral trade agreements make free trade less likely to occur the answer is that it depends on the size distribution of the trading blocs if there is one large trading bloc along with some smaller ones then bilateral trade agreements allow the smaller trading blocs to coalesce and block the monopoly power of large trading blocs in this case bilateral trade agreements facilitate the attainment of free trade not allowing customs unions leads to more not less protection if trading blocs are of roughly equivalent size then bilateral trade agreements allow groups of trading blocs to more effectively monopolize world trade in which case they may make free trade less likely these results suggest that a policy that inhibits the formation of trading blocs may be harmful we also compute the welfare effects of trade agreements to get some idea of how empirically important these issues are

endogenous trade bloc formation in an asymmetric world this paper investigates how variations in endowments and the structure of preferences impact on the coalition formation decisions of asymmetric countries there exist relatively few general results on the relationship between country characteristics and trade bloc formation here new light is shed on this issue by systematically simulating bloc formation and by explicitly analysing the blocking behaviour of coalitions a general equilibrium model of world trade is implemented with equilibrium coalition formation being modelled using the equilibrium concept of the core it is found that global free trade is observed when all countries are similar customs unions tend to form between countries with adjacent consumer preferences or with adjacent endowments of their export commodity finally in contrast to the existing literature but consistent with observed behaviour it is found that free trade areas often pareto dominate customs unions provided consumer preferences differ sufficiently

the size of trading blocs market power and world welfare effects abstract we construct an n country n commodity trade model to analyze the implications of bloc size for nash equilibrium tariffs and welfare the relationship between the absolute size of symmetric trading blocs and their market power is ambiguous and we illustrate how this relationship varies with model parameters in contrast sufficiently large increases in the relative size of a bloc enhance its relative market power and cause the welfare of its country members to rise above the free trade level we establish the existence of an optimal bloc size and study the dependence of optimal size on the parameters of the model

all pay contests this paper studies a class of games all pay contests which capture general asymmetries and sunk investments inherent in scenarios such as lobbying competition for market power labor market tournaments and r d races players compete for one of several identical prizes by choosing a score conditional on winning or losing it is weakly better to do so with a lower score this formulation allows for differing production technologies costs of capital prior investments attitudes toward risk and conditional and unconditional investments among others i provide a closed form formula for players equilibrium payoffs and analyze player participation a special case of contests is multiprize complete information all pay auctions

optimum tariffs and retaliation revisited how country size matters in his seminal work on tariff retaliation johnson review of economic studies 21 1953 1954 showed that a country will win a bilateral tariff war if its relative monopoly monopsony power in world trade is sufficiently large however it is unclear from johnson s analysis and from subsequent research on the subject how this power is determined in general economic environments an important goal of this paper is to address this issue with the help of a neoclassical trade model in which country size is at centre stage it is shown that a sufficient condition for a country to prefer a non cooperative nash tariff equilibrium retaliation over free trade is that its relative size be sufficiently large the paper also refines the structure of the general trade model and generates additional characterization results on the importance of country size for best response tariff functions retaliatory tariffs and welfare

globalisation and obesity he externalities arising as a consequence of trade liberalisation have rarely been a topicof much public debate a possible exception would be the relationship between the inter national trade and resulting environmental degradation markusen 1975 conrad 1993 ludema and wooton 1994 even then the mechanisms that link the volume of internationaltrade and the rate of environmental degradation are seldom adequately explained part of theproblem is that the environmental problems that are faced are extremely varied both in char acter and severity and it is fruitless to attempt to provide a single remedy for all of them but environmental degradation is hardly the only externality caused by trade liberalisation ifone considers a broader process such as globalisation de ned as a process by which national regional economies societies and cultures have become integrated through a global networkof economic technological socio cultural political and biological factors croucher 2004 rather than the trade liberalisation only the possibility of its resulting externalities increasessigni cantly there is for example a growing literature addressing possible adverse impact ofglobalisation including trade liberalisation on cultural diversity within in particular non wes tern countries castells 1997 cowen 2002 segerstrom 2003 in addition the relevance ofthe topic is underscored by the unesco 2001 universal declaration on cultural diversity which emphasises the role of cultural goods as vectors of identity and is concerned aboutcurrent trade imbalances in related sectors furthermore one can easily imagine the adverseimpact of globalisation with its free ow of people goods and in turn the lifestyle on spread ing of infectious diseases such as aids altman 1999 attawell 2004 according to the world health organization who 2006 approximately 1 6 billionadults were overweight and at least 400 million were obese in 2005 all around the world more recent statistics show that just in the united states 33 3 percentage of the total popula tion is obese and about 60 percentage is overweight or obese wyatt et al 2006 who 2009 these numbers set the united states among top three countries in the world with thehighest obesity rate who 2009 shared with egypt and saudi arabia obesity has not onlyincreased in developed countries but more surprisingly in developing countries as well according to the food and agriculture organization of the united nations fao 2008 obesity increases rapidly in developing countries even in those where hunger still exists forinstance the number of overweight people increased from less than 10 to 15 percentage inchina during the last two decades in sub saharan countries where hunger rates are the high est obesity is increasing as well some developing countries such as brazil and colombia have 40 percentage of overweight or obesity rate a number comparable to those in developedcountries due to this rapid and continuous global increase of obesity the who describesobesity as a global epidemic

equilibrium under price controls with endogenous transactions costs abstract in this paper we present an equilibrium model for an exchange economy with fixed prices and endogenously determined search or transactions costs given the fixed prices endogenously determined equilibrium buying and selling prices which include transactions costs result these costs occur on either the demand or supply side of each market but not both we see an eventual application of this approach to an evaluation of welfare costs of either economy wide wage and price controls or sector specific price controls such as energy in the final section we present some simple numerical examples which illustrate the approach

measuring the restrictiveness of trade policy this article provides an introduction to the trade restrictiveness index tri which equals the uniform tariff that is welfare equivalent to a given pattern of trade protection unlike standard measures of trade restrictiveness the tri has a solid theoretical basis can incorporate both tariffs and quantitative restrictions and can be adapted to construct the trade policy equivalent of domestic distortions the article compares a number of applications and describes procedures for operationalizing the tri on a personal computer the authors conclude that the tri has considerable potential in empirical work

different paths to free trade the gains from regionalism we compare free trade reached through expanding regional trading blocs to free trade accomplished by multilateral negotiation with sunk costs the outcomes are different trade in an imperfectly competitive good flows disproportionately more between the original members of a regional agreement even after free trade is reached they secure a higher welfare level from regionalism than from free trade achieved multilaterally nonmembers however reach a lower welfare level a surprising result is that world welfare during free trade is greater when it is achieved by the regional path we conclude with some empirical evidence from the european union that is consistent with the model

monotone equilibrium of two bidder all pay auctions redux abstract in this paper we revisit the two bidder asymmetric all pay auction of amann and leininger 1996 by allowing interdependent values and correlated signals both values and signals are distributed on continuous supports we provide conditions for the existence and uniqueness of a monotone pure strategy equilibrium mpse and constructively characterize the mpse when it exists we find that given the marginal distributions of the signals the equilibrium allocation is solely determined by how bidders values depend on their signals in particular the equilibrium allocation does not depend on how bidders signals are correlated

a note on the optimal tariff retaliation and the welfare loss from tariff wars in a framework with intraindustry trade abstract this paper uses krugman s 1980 model of trade with product differentiation and monopolistic competition to examine the effects of a uniform ad valorem tariff the main results are there exists an optimal tariff even for a small economy and the optimal tariff rate is an increasing function of the size of the economy and the degree of production differentiation under reasonable parameter assumptions a tariff war between two countries of equal size in which each country retaliates by imposing its own optimal tariff causes a welfare loss equivalent to a drop in income of about 4 percent

applied general equilibrium models of taxation and international trade an introduction and survey we wish to acknowledge the help of three referees and of john pencavel on several earlier drafts as well as the assistance of the modelers whose work is referred to in the paper they corrected our lack of understanding of their work and provided many other helpful comments excellent research and bibliographical assistance have been provided by debbie fretz radwan shaban and janet stotsky helpful comments have been made by charles ballard michael boskin lans bovenberg sylvester damus harvey galper glenn harrison gordon lenjosek jack mutti serena ng t n srinivasan charles stuart and eric toder the authors also acknowledgefinancial support from the national bureau of economic research the national science foundation international business machines and the social sciences and humanities research council ottawa canada

smuggling and price disparity abstract this paper proposes a model of smuggling consistent with the coexistence of smuggling legal trade and price disparity defined as a domestic price which exceeds is less than the return from legal export import these phenomena have been found to characterize indonesian smuggling a framework is presented in which legal trade is used to cloak smuggling activity with the implication that the greater the volume of legal trade the less the costs of smuggling this model is then used to explain the observation noted above and to show that smuggling may be welfare increasing vis a vis the non smuggling situation and that even if the suppression of smuggling is costless tax revenue maximization may require a positive level of smuggling in addition the model is applied to coffee and rubber exports from indonesia

markets under price controls in partial and general equilibrium abstract when parallel markets arise in the face of price or other controls two aspects of agents behavior become crucial in analyzing market outcomes first sellers risk will rise with increases in illegal sales but may also fall with increases in legal sales if the latter is true the parallel market price will induce higher output second if consumers can be given access to the price controlled good without incurring search queuing and other transaction costs due to rationing production of the controlled good will be higher these effects are demonstrated in both partial and general equilibrium

service sector restrictiveness and economic performance an estimation for the mena region this article aims to assess barriers to service provision in the banking and telecom sectors of four middle east and north africa mena countries and the impact of these barriers on firm performance our methodology involves the computation of aggregate and modal trade restrictiveness indices tris by sector and utilisation of these tris as regressors of firms economic performance our analysis shows that significant regulatory reforms have taken place in the service sectors over the last decade in the mena region but that a broad range of restrictions still remain the most significant change in these service sectors has been the lifting or softening of constraints on foreign equity participation these regulatory reforms however have had varying degrees of impact on market structure depending on the country the sector and the mode moreover service restrictions have had an impact on economic performance in the three studied sectors while a rent creating effect seems to dominate restrictions on banking and fixed telecom sectors a cost inefficiency effect seems to dominate the mobile telecom sector finally we find evidence of interactions between modal restrictions for banking services our results suggest a complementarity between modes 3 and 1 as well as a substitution effect between modes 3 and 4 in the banking sector

general equilibrium analysis of black and white markets a computational approach abstract this paper explores the inter relationship between black and white markets and presents a formulation in which equilibrium conditions hold separately for each type of market for each product with linking conditions across market types using a traditional goods and factor general equilibrium model the simultaneous operation of price controls on white markets and surveillance with penalties for those caught trading on black markets is modelled a numerical example of such an economy is presented using data for india and equilibria under coexistence are reported

trade deflection and trade depression this is the first paper to empirically examine whether a country s use of an import restricting trade policy distorts a foreign country s exports to third markets we first develop a theoretical model of worldwide trade in which the imposition of antidumping and safeguard taris or trade remedies by one country causes significant distortions in world trade flows we then empirically test this model by investigating the eect of the united states use of such import restrictions on japanese exports of roughly 4800 products into 37 countries between 1992 and 2001 our estimation yields evidence that us restrictions both deflect and depress japanese export flows to third countries imposition of a us antidumping measure against japan deflects trade as the average antidumping duty on japanese exports leads to a 5 7 increase in japanese exports of the same product to the average third country market the imposition of a us antidumping measure against a third country depresses trade as the average us duty imposed on a third country leads to a 5 19 decrease in japanese exports of that same product to the average third country s market we also document the substantial variation in trade deflection and trade depression across dierent importing countries and exported products

measuring protection mission impossible abstract there seems to be some confusion between openness and protection measures in the international trade literature the aim of this paper is to bring together the state of the art in quantifying trade policy measures and for this reason we focus on the extent of the protection granted by policies rather than on the degree of openness of the economy given the considerable amount of literature that deals with these issues we will limit our review as follows on the one hand we focus on trade policies implemented at the border and therefore do not consider all the other possible public interventions influencing trade flows on the other hand we only take into account indexes that explicitly adopt a metric expressed in a scalar aggregate tariff and quota equivalent measures or an index in a closed interval we distinguish between indexes that aggregate across products same barrier for more products and indexes that aggregate across instruments more barriers for the same product finally in order to classify the large number of indexes covered in our review we propose a typology based on three categories incidence outcome and equivalence

the political economy of immigration law impact of simpson rodino on the united states and mexico about two years ago the united states passed the immigration reform and control act also called the simpson rodino bill of 1986 the act called for increased enforcement of migration policy employer sanctions and amnesty for those who could prove continuous residence since 1982 despite considerable discussion and debate prior to the act the legislation was passed without any comprehensive economic analysis of its potential impact on the united states or its main source of undocumented immigration mexico notwithstanding the politically charged atmosphere surrounding the bill the sense among many in congress and the white house that we need to restore control over our borders and the determination by mexico to stay out of what it regarded as a domestic u s legislative matter the absence of attention to basic economics in a bill so fundamental to the performance of both countries was surprising in this paper we shall look at some implications of the recent immigration law for both economies given their widely differing levels of income and productivity the challenges each faces to restructure its economy given increased international competitiveness and the particular problems and opportunities presented by a common border with growing labor market interdependence by our calculations the economic opportunity cost of simpson rodin o as compared to continuation of the prior status quo will add up to a present value of 110 billion between now and the year 2000 a general equilibrium approach to the problem of migration policy indicates that the united states has even more to gain than mexico from greater accessibility to mexican labor in the next decade than simpson rodino would permit however the gains to capital and the majority of higher skilled workers would be partially offset by slower earnings growth for the lowest 10 percent of its wage earners mexico on the

rigging the lobbying process an application of the all pay auction textabstractin a world where a politician can explicitly auction off a prize to the high bidder the standard auction literature can be used to analyse political behavior the justice system however precludes politicians from explicitly selling the prize to the highest bidder thus politicians cannot let it become public knowledge that they are in the business of selling political favors an institution has emerged in political markets to overcome this constraint which are termed as lobbying lobbyists make implicit payments to the politician through campaign contributions if these up front payments were rebated to those failing to receive the prize it would be clear that the politician was selling favors this article has examined an interesting principle arising in all pay auctions this principle states that a politician wishing to maximize political rents may find it in his best interest to exclude certain lobbyists from participating in the lobbying process particularly lobbyists valuing most the political prize

asymmetric all pay auctions with interdependent valuations abstract i show that a unique equilibrium exists in an asymmetric two player all pay auction with a discrete signal structure correlated signals and interdependent valuations the proof is constructive and the construction can be implemented as a computer program and be used to derive comparative statics i also characterize the set of equilibria when a reserve price is introduced

sequencing regional trade integration and cooperation agreements trade integration agreements and other international cooperation agreements have proliferated in recent years around the world rather than being spurred by exogenous forces alone the two phenomena are likely to be both path dependent and endogenous to one another however the theoretical and empirical understanding of the relationships between agreements forged in different domains of cooperation remains nascent the purpose of this paper is to describe a new extensive dataset on international agreements that can be employed to start mending the gaps in the literature and to develop best practices of sequencing international agreements to obtain higher pay offs from cooperation of particular interest here is the relationship between trade integration and other cooperation agreements the data provide preliminary grounds for hypothesising that trade integration agreements can be a particularly likely catalyst for further cooperation between states

optimal tariff calculations in alternative trade models and some possible implications for current world trading arrangements in this paper we report calculations of optimal tariffs both with and without retaliation in a sequence of 2 2 trade models we extend the earlier calculations by johnson 1954 1961 and gorman 1957 which assume constant elasticity offer surfaces by using functional forms from the cobb douglas ces les family for utility functions and by also incorporating production into our calculations results indicate that the most critical parameters in any such calculations for a 2 2 model are the import prices elasticities and we briefly survey the empirical evidence as to their values our major conclusion is that these models confirm the suggestion from casual inspection of reported trade elasticities that current levels of tariff protection are some distance from optimal tariffs and that the margin for tariff retaliation in a worldwide trade war is potentially large other implications of the results are explored in the text

the parallel market of illegal aliens a computational approach abstract this paper develops the notion of illegal aliens as a parallel market in coexistence with the regular market of legal labor in the presence of both price controls on legal labor by minimum wage legislation and quantity controls on illegal aliens by immigration laws illegal aliens involve not only rural urban migration but also tax evasion and deportation costs we develop an analytical equilibrium structure which links markets for legal labor and illegal aliens illustrate how much an equilibrium can be computed and explore some implications of the linkage using united states data

third country effects on the formation of free trade agreements the recent proliferation of free trade agreements ftas has resulted in an increasingly complex network of preferential trading relationships the economics literature has generally examined the formation of ftas as a function of the participating countries economic characteristics alone in this paper we show both theoretically and empirically that the decision to enter into an fta is also crucially dependent on the participating countries existing fta relationships with third countries accounting for the interdependence of ftas helps to explain a significant fraction of fta formations that would not otherwise be predicted by countries economic characteristics

a strategic and welfare theoretic analysis of free trade areas abstract we construct a three country model to determine how the formation of free trade areas ftas affects optimal tariffs and welfare we find that at constant rest of the world row tariffs the adoption of internal free trade induces union members to reduce their external tariffs below the kemp wan j int econom 6 1976 95 97 level and causes row s terms of trade to improve and its welfare to rise when row also behaves optimally its policy response to the formation of the fta is to raise tariffs generally fta members prefer to liberalize internal trade partially and find regional integration appealing only if their collective size is sufficiently large we also demonstrate how ftas may undermine the attainment of global free trade

preferential trade agreements and multilateral tariff cooperation are preferential trade agreements ptas building or stumbling blocks for multilateral trade liberalization i address this question in an infinitely repeated tariff game between three countries engaged in intraindustry trade under oligopoly the central result is that when countries are symmetric a free trade agreement fta undermines multilateral tariff cooperation by adversely affecting the cooperation incentive of the nonmember whereas a customs union cu does so via its effect on the cooperation incentives of members however when countries are asymmetric with respect to either market size or cost there exist circumstances where ptas facilitate multilateral tariff cooperation

critical evidence on comparative advantage north north trade in a multilateral world there are two principal theories of why countries trade comparative advantage and increasing returns to scale which is most important in practice the large volume of intra oecd trade is frequently cited as critical evidence on this question it is argued that comparative advantage unlike scale economies is incapable of accounting for the large volume of trade between seemingly similar economies this is a theoretical claim in this paper i show that it is possible to give an account of this trade based on comparative advantage the elements that may give rise to a large volume of north north trade are traced to identifiable features of technology and endowments

caps on political lobbying the cost of political campaigns in the u s has risen substantially in recent years for example real spending on congressional election campaigns doubled between 1976 and 1992 steven d levitt 1995 there are many reasons why increased campaign spending might be socially harmful first increased spending means increased fund raising which may keep politicians from their legislative duties 1 second a lobbyist who makes a large campaign contribution may have undue influence on electoral outcomes on the shaping of legislation or on the outcome of regulatory proceedings 2 that is the socially preferred candidate or legislation may not prevail likewise a lobbyist involved in a regulatory matter or a competition for a government contract may benefit unduly from a legislator s intervention 3 third a perception that campaign contributions purchase influence may lead to increased tolerance of corruption in the private sector a desire to control campaign spending has spawned many initiatives to limit both campaign contributions and spending beginning with the passage of the federal election campaign act feca political action committees pacs can contribute at most 5 000 per election to a candidate while individuals can contribute at most 1 000 restrictions have also been put on in kind contributions making it more difficult to circumvent these limits 4 while direct restrictions on campaign spending have proven difficult to implement recent initiatives aim to impose voluntary spending limits and stricter limits on contributions 5 despite the existing legislation and the proposals to limit contributions little is known about the impact of contribution limits on aggregate expenditures while it is intuitively appealing that aggregate expenditures would drop we challenge that intuition here we study a lobbying game and show that a cap on individual lobbyists expenditures may have the perverse effect of increasing aggregate expenditures and loweri this abstract was borrowed from another version of this item

can border industries be a substitute for immigration the author examines the extent to which the development of border industries might reduce the flow of migrants from mexico to the united states in particular he examines the impact of the mexican border industrialization program developed during the mid 1960s the author concludes that the development of such industries on the mexican border not only may not reduce migration flows to the united states but may actually increase them annotation

global supply chains and trade policy responses to the 2008 crisis the collapse in trade and the contraction of output that occurred during 2008 9 was comparable to and in many countries more severe than the great depression of the 1930s however it did not give rise to the rampant protectionism that followed the great crash the idea that the rise in the fragmentation of production across global value chains vertical specialization may be a deterrent against protectionism is under appreciated in the literature institutions also played a role in limiting the extent of protectionist responses world trade organization discipline raises the cost of using trade policies for member countries and has proved to be a stable foundation for the open multilateral trading system that has been built over the past 50 years using tradeand protection data for seven large emerging market countries that have a history of active use of trade policy the influence of these and other factors on trade policy responses to the 2008 crisis are empirically examined an instrumental variables strategy is used to identify their impact participation in global value chains is found to be a powerful economic factor determining trade policy responses

asymmetric all pay auctions with incomplete information the two player case abstract we prove existence and uniqueness of bayesian equilibrium for a class of generally asymmetric all pay auctions with incomplete information due to its importance in applications some prominence is given to the first price all pay auction for which a detailed characterization of equilibrium and an approximation to equilibrium of its well studied complete information version are supplied furthermore we relate our uniqueness result to the well known multiplicity of equilibria in the war of attrition second price all pay auction which emerges as a limit point of the class of two player auction games considered journalof economic literature classification numbers d44 c62 c72

the clash of liberalizations preferential versus multilateral trade liberalization in the european union there has been an explosion in the number of preferential trade agreements in the past decade preferential trade agreements are characterized by liberalization with respect to only a few partners and thus they can potentially clash with and retard multilateral trade liberalization despite this important concern with preferential trade agreements there is almost no systematic evidence on whether they actually affect multilateral trade liberalization the authors model the effect of preferential trade agreements on multilateral trade liberalization and show that preferential trade agreements slow down multilateral trade liberalization unless they have a common external tariff and allow for internal transfers next they use detailed data on product level tariffs negotiated by the european union in the past two multilateral trade rounds to structurally estimate their model the authors confirm the main prediction the european union s preferential trade agreements have clashed with its multilateral trade liberalization and find that the effect is quantitatively significant moreover they also confirm several auxiliary predictions of the model and provide new evidence on the political economy determinants of multilateral liberalization in the european union

on tariff preferences and delegation decisions in customs unions a heckscher ohlin approach this paper studies preferences of customs union cu members over common external tariff cet levels and extends the literature on delegation decisions over trade policy in models with production in a model with similar cu members we prove that most preferred cets can be ranked with the help of compensated price elasticities of import demand functions in the heckscher ohlin trade model we show these elasticities depend on inter country differences in relative factor endowments and inter sectoral differences in technology this helps identify the optimal policy maker in a cu and demonstrates delegation decisions over trade policy can be integrated into mainstream trade theory the proliferation of preferential trade agreements ptas in the 1990s has presented policy analysts with a dual challenge to identify how these arrangements affect policy makers incentives to intervene in trade and to predict their implications for welfare economists responded to this challenge vigorously thanks to their research efforts a substantial body of work is now available addressing these issues under alternative assumptions regarding the theoretical environment considered including the objectives of policy makers the nature of their interactions the gatt rules that might constrain these interactions market structure the process of coalition formation etc 1 still while undeniably valuable the recent literature on regionalism has shed limited light on an important issue how heterogeneity among partners in a pta shapes their national preferences over external tariff levels and how these preferences in turn manifest themselves in the formation of actual trade

the welfare cost of the underground economy this paper estimates the welfare cost of taxes that create an incentive for resources to flow to the underground or untaxed sector in the united states using a general equilibrium model of the american economy the welfare cost is found to be large and growing in absolute and relative terms over time in 1980 the welfare cost may be as much as 220 billion or over 9 percent of output even conservative estimates place the loss at nearly 100 billion it also is found that small reductions in tax rates substantially reduce the welfare cost

trade reform with quotas partial rent retention and tariffs quotas are the predominant means of protection in developed countries with quota rents commonly shared between exporter and importer this paper derives shadow prices appropriate to evaluating trade reform under these circumstances and provides a number of useful sufficient conditions for welfare improving piecemeal reform in doing so the authors apply the distorted quantity constrained expenditure function and use implicit separability to derive more powerful results than have previously been available

local food prices and international price transmission world food prices spiked in the periods 2007 8 and 2010 11 the impact of these spikes in world food prices on local food prices and thus on local consumers is determined by the food price pass through pass through is defined as the extent to which changes in world food prices lead to changes in local food prices we examine the determinants of variation in food price pass through from global to local consumer prices in a global sample of 147 countries using fao data on world food prices and ilo data on food prices for consumers while market integration matters our study finds that income per capita is the dominant factor explaining cross country variation in pass through of food prices we estimate an elasticity of about 0 3 of pass through with respect to income per capita this means far greater price transmission of food price shocks at the commodity level to final consumers in low income countries than in high income countries the implication is that future swings in world food prices will in particular jeopardize food security in poor countries trade policy measures of market integration also affect the pass through significantly whereas infrastructure and geography measures play no significant role

all pay auctions with affiliated binary signals abstract we analyze all pay auctions with affiliated values and binary signals we analyze the unique symmetric equilibrium with any number of bidders and show that the bidders earn positive rents only if the equilibrium is monotone we also characterize the symmetric equilibrium of the closely related two player war of attrition we compare expected revenues across these formats all pay auctions result in lower expected rents to the bidders than standard auctions but they also induce inefficient allocations in some models with affiliated private values with two bidders the effect on rent extraction dominates and the all pay auctions outperform standard auctions in terms of expected revenue with many bidders standard auctions may result in higher expected revenue the war of attrition outperforms the standard auctions in terms of revenue but its ranking relative to all pay auctions is ambiguous

on the effects of entry in cournot markets in the framework of symmetric cournot oligopoly this paper provides two minimal sets of assumptions on the demand and cost functions that imply respectively that as the number of firms increases the minimal and maximal equilibria lead to i decreasing industry price and increasing or decreasing per firm output and ii increasing industry price and decreasing per firm output in both cases per firm profits are decreasing the analysis relies crucially on lattice theoretic methods and yields general unambiguous and easily interpretable conclusions of a global nature as a byproduct of independent interest new insight into existence of cournot equilibrium is developed

the direct and relative effects of preferential market access abstract the proliferation of preferential trade agreements has resulted in a complex system of preferences in which market access conditions are often discriminatory in this paper we investigate how market access conditions have evolved between 2000 and 2009 and how this has affected international trade our results show that the proliferation of preferential access has increased bilateral trade not only due to lower tariffs but also because preferential access often resulted in higher preferential margins vis a vis foreign competitors the results also indicate that the evolution of the system of preferences has been disadvantageous for countries that did not actively engage in forming new trade agreements

production weighted estimates of aggregate protection in rich countries towards developing countries a challenge in the development of aggregate indexes of trade protection is weighting individual tariffs in ways that a reflect their importance and b are not endogenous to the protection being measured the most obvious basis for weights is actual imports but these may be highly endogenous various authors have worked to correct this endogeneity for example in the bouet et al 2004 macmap data set weights are based on imports of reference groups of countries but eliminating the endogeneity is difficult in product areas where protection is high and widespread i develop a new set of estimates of overall protection in rich countries with respect to developing ones that eschews import weights as much as possible in favour of weights based on the value of exporter s total production the results are generally higher than those of bouet et al product areas in which protection is high and widespread seem systematically de emphasised when using macmap weights especially in agriculture i also estimate tariff equivalents of trade distorting subsidies by country and commodity agricultural tariffs dominate subsidies in trade distorting effect and agricultural protection in turn dominates goods protection generally japan is most protective largely because of rice tariffs near 900 per cent followed by norway and switzerland because of their greater reliance on agriculture the poorest countries face the highest barriers despite tariff preferences