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Bargaining in International Trade under Exchange-Rate Uncertainty


  • Donnenfeld, Shabtai
  • Zilcha, Itzhak


This paper examines the implications of various contracting alternatives between exporting and importing firms on the volume of international transactions. The contracts that we study are determined in a bargaining situation under exchange-rate uncertainty. First we look at contracts which entail an ex ante commitment on price and quantity of exports without the possibility of renegotiation ex post. Second, spot contracts, i.e., the price and the quantity of exports are negotiated after the exchange the rate is known. A third type of contracts consists of ex ante commitment and ex post renegotiation. Copyright 1995 by Blackwell Publishing Ltd.

Suggested Citation

  • Donnenfeld, Shabtai & Zilcha, Itzhak, 1995. "Bargaining in International Trade under Exchange-Rate Uncertainty," Review of International Economics, Wiley Blackwell, vol. 3(3), pages 249-263, October.
  • Handle: RePEc:bla:reviec:v:3:y:1995:i:3:p:249-63

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    References listed on IDEAS

    1. Glenn Jenkins, 1985. "Costs And Consequences Of The New Protectionism: The Case Of Canada’S Clothing Sector," Development Discussion Papers 1985-04, JDI Executive Programs.
    2. John Whalley, 1984. "Trade Liberalization among Major World Trading Areas," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262231204, July.
    3. Cable, Vincent, 1987. "Textiles and Clothing in a New Round of Trade Negotiations," World Bank Economic Review, World Bank Group, vol. 1(4), pages 619-646, September.
    4. Trela, I. & Whalley, J., 1989. "Unravelling The Threads Of The Mfa," Papers 448, Stockholm - International Economic Studies.
    5. Dawkins, Christina & Srinivasan, T.N. & Whalley, John, 2001. "Calibration," Handbook of Econometrics,in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 5, chapter 58, pages 3653-3703 Elsevier.
    6. Hamilton, Carl, 1986. "An Assessment of Voluntary Restraints on Hong Kong Exports to Europe and the USA," Economica, London School of Economics and Political Science, vol. 53(211), pages 339-350, August.
    7. Shoven, John B & Whalley, John, 1984. "Applied General-Equilibrium Models of Taxation and International Trade: An Introduction and Survey," Journal of Economic Literature, American Economic Association, vol. 22(3), pages 1007-1051, September.
    8. Falvey, Rodney E, 1979. "The Composition of Trade within Import-restricted Product Categories," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 1105-1114, October.
    9. Carl B. Hamilton, 1988. "Restrictiveness and International Transmission of the "New" Protectionism," NBER Chapters,in: Issues in US-EC Trade Relations, pages 201-230 National Bureau of Economic Research, Inc.
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    Cited by:

    1. Ligthart, Jenny E. & Werner, Sebastian E.V., 2012. "Has the euro affected the choice of invoicing currency?," Journal of International Money and Finance, Elsevier, vol. 31(6), pages 1551-1573.
    2. Friberg, Richard & Wilander, Fredrik, 2008. "The currency denomination of exports -- A questionnaire study," Journal of International Economics, Elsevier, vol. 75(1), pages 54-69, May.
    3. Friberg, Richard & Wilander, Fredrik, 2007. "Price Setting Transactions and the Role of Denominating Currency in FX Markets," Working Paper Series 201, Sveriges Riksbank (Central Bank of Sweden).
    4. Friberg, Richard, 1996. "On the Role of Pricing Exports in a Third Currency," SSE/EFI Working Paper Series in Economics and Finance 128, Stockholm School of Economics.

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