Optimal Design of Trade Agreements in the Presence of Renegotiation

• 成果类型: Article
• 署名作者: Maggi, Giovanni; Staiger, Robert W.
• 署名单位: Yale University; Getulio Vargas Foundation; National Bureau of Economic Research; Dartmouth College
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MICROECONOMICS
• ISSN/ISSBN: 1945-7669
• DOI: 10.1257/mic.20120232
• 发表日期: 2015
• 页码: 109-143
• 关键词: Mechanism design; LIABILITY RULES; property rules; CONTRACT; escape

摘要

We study the optimal design of trade agreements when governments can renegotiate after the resolution of uncertainty but compensation between them is inefficient. In equilibrium, renegotiation always results in trade liberalization, not protection. The optimal contract may be a property rule or a liability rule. High uncertainty favors liability over property rules, while asymmetries in bargaining power favor property over liability rules. Moreover, optimal property rules are never renegotiated. With a cost of renegotiation, property rules are favored when this cost is higher, reversing a central conclusion of the law-and-economics literature.