Why are Trade Agreements Regional?
| dc.creator | Zissimos, Ben | |
| dc.date | 2017-04-01T14:10:50Z | |
| dc.date.accessioned | 2026-07-09T02:54:56Z | |
| dc.description | This paper shows how distance may be used to coordinate on a unique equilibrium in which trade agreements are regional. Trade agreement formation is modeled as coalition formation. In a standard trade model with no distance between countries, a familiar problem of coordination failure arises giving rise to multiple equilibria; any one of many possible trade agreements can form. With distance between countries, and through strategic interaction in tariff setting, regional trade agreements generate larger rent-shifting effects than non regional agreements, which countries use to coordinate on a unique equilibrium. Under naive best responses, regional agreements give way to free trade. | |
| dc.identifier | doi:10.22004/ag.econ.9102 | |
| dc.identifier | https://ageconsearch.umn.edu/record/9102/files/wp070067.pdf | |
| dc.identifier | http://ageconsearch.umn.edu/record/9102 | |
| dc.identifier.uri | http://hdl.handle.net/123456789/522793 | |
| dc.language | eng | |
| dc.publisher | ||
| dc.source | http://ageconsearch.umn.edu/record/9102 | |
| dc.title | Why are Trade Agreements Regional? | |
| dc.type | Text |