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Anarchy And Autarky: Endogenous Predation As A Barrier To Trade

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  • James E. Anderson
  • Douglas Marcouiller

Abstract

This article presents a general equilibrium two-country Ricardian trade model with endogenous transactions costs that arise from individual utility-maximizing allocation of labor to production and piracy. In the absence of institutions for risk sharing and coordination of defense, autarky obtains over most of the parameter space. When both trade and predation are supported in equilibrium, terms of trade effects can make security immiserizing. In that case, paradoxically, predation creates trade. Copyright 2005 by the Economics Department Of The University Of Pennsylvania And Osaka University Institute Of Social And Economic Research Association.

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Bibliographic Info

Article provided by Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association in its journal International Economic Review.

Volume (Year): 46 (2005)
Issue (Month): 1 (02)
Pages: 189-213

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Handle: RePEc:ier:iecrev:v:46:y:2005:i:1:p:189-213

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  1. Anderton, Charles H & Anderton, Roxane A & Carter, John R, 1999. "Economic Activity in the Shadow of Conflict," Economic Inquiry, Western Economic Association International, vol. 37(1), pages 166-79, January.
  2. Trefler, Daniel, 1995. "The Case of the Missing Trade and Other Mysteries," American Economic Review, American Economic Association, vol. 85(5), pages 1029-46, December.
  3. Skaperdas, S. & Syropoulos, C., 2000. "Guns, Butter, and Openness: On The Relationship Between Security and Trade," Papers 00-01-23, California Irvine - School of Social Sciences.
  4. James E. Rauch & Vitor Trindade, 1999. "Ethnic Chinese Networks in International Trade," NBER Working Papers 7189, National Bureau of Economic Research, Inc.
  5. Grossman, Herschel I & Kim, Minseong, 1995. "Swords or Plowshares? A Theory of the Security of Claims to Property," Journal of Political Economy, University of Chicago Press, vol. 103(6), pages 1275-88, December.
  6. Skaperdas, S., 1991. "Cooperation, Conflict And Power In The Absence Of Property Rights," Papers 90-91-06a, California Irvine - School of Social Sciences.
  7. David L. Hummels & Georg Schaur, 2013. "Time as a Trade Barrier," American Economic Review, American Economic Association, vol. 103(7), pages 2935-59, December.
  8. Dani Rodrik, 2000. "How Far Will International Economic Integration Go?," Journal of Economic Perspectives, American Economic Association, vol. 14(1), pages 177-186, Winter.
  9. James E. Rauch, 1996. "Networks versus Markets in International Trade," NBER Working Papers 5617, National Bureau of Economic Research, Inc.
  10. Skaperdas, S. & Syropoulos, C., 1996. "Insecure Properties and the Stability of Exchange," Papers 95-96-8, California Irvine - School of Social Sciences.
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