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 InfoPaper provided by Paris Dauphine University in its series Economics Papers from University Paris Dauphine with number 123456789/92.
Date of creation: Oct 2004
Date of revision:
Publication status: Published in Economics Bulletin, 2004, Vol. 6, no. 15. pp. 1-10.Length: 9 pages
Optimism; Free trade commitment; Trade losses; Idiosyncratic risk;
Find related papers by JEL classification:
- F1 - International Economics - - Trade
- D8 - Microeconomics - - Information, Knowledge, and Uncertainty
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