The welfare effects of international trade with optimistic and pessimistic managers
AbstractThis paper investigates the welfare effects of international trade when technological idiosyncratic risk is distorted by optimistic and pessimistic managers. We show that free trade always improves the ex-ante welfare but sometimes lowers the ex-post welfare. Free trade commitment can be regretted ex-post.
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Bibliographic InfoArticle provided by AccessEcon in its journal Economics Bulletin.
Volume (Year): 6 (2004)
Issue (Month): 15 ()
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Find related papers by JEL classification:
- F1 - International Economics - - Trade
- D8 - Microeconomics - - Information, Knowledge, and Uncertainty
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