Trade Barriers as Outcomes from Two-Stage Games: Evidence
A substantial theoretical literature on trade policy as equilibrium outcomes from cooperative and non-cooperative games has grown recently, but its implications have rarely been subjected to empirical scrutiny. It not only makes predictions about equilibrium levels of protection, but also positive observations about the choice of trade instruments. In this paper predictions from the two-stage games in Copeland (1990) and Copeland, Tower, and Webb (1989) are empirically investigated using bilateral non-tariff barrier (NTB) data between the United States and nine developed partner countries. This 'first round' of systematic empirical evidence suggests directions for further theoretical work.
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Volume (Year): 32 (1999)
Issue (Month): 4 (August)
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