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The welfare effects of international trade with optimistic and pessimistic managers

Author

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  • Frederic Peltrault

    (EURIsCO University of Paris Dauphine)

  • Michel Blanchard

    (INALCO and EURIsCO University of Paris Dauphine)

Abstract

This 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.

Suggested Citation

  • Frederic Peltrault & Michel Blanchard, 2004. "The welfare effects of international trade with optimistic and pessimistic managers," Economics Bulletin, AccessEcon, vol. 6(15), pages 1-10.
    • Handle: RePEc:ebl:ecbull:eb-04f10008
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    References listed on IDEAS

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    Cited by:

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    3. Blanchard, Michel & Blanchard, Frederic, 2007. "Optimism, Pessimism, and the Gains from Trade," MPRA Paper 6342, University Library of Munich, Germany.

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    More about this item

    JEL classification:

    • F1 - International Economics - - Trade
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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