This paper examines equilibrium trade policies when firms have better information than governments about the profitability of the industry. Contrary to the intuition that the policy makers' lack of information should reduce their incentives to engage in strategic trade intervention, the analysis suggests that information asymmetries may increase trade policy distortions in equilibrium, and ultimately worsen the Prisoner's Dilemma between governments.
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Paper provided by Princeton, Woodrow Wilson School - Public and International Affairs in its series Papers with number
189.
Length: 28 pages Date of creation: 1997 Date of revision: Handle: RePEc:fth:priwpu:189
Contact details of provider: Postal: PRINCETON UNIVERSITY, WOODROW WILSON SCHOOL OF PUBLIC AND INTERNATIONAL AFFAIRS, PRINCETON NEW- JERSEY 08542 U.S.A. Phone: (609) 258-4800 Web page: http://www.wws.princeton.edu/ More information through EDIRC
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Find related papers by JEL classification: F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
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