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Anarchy And Autarky: Endogenous Predation As A Barrier To Trade


  • James E. Anderson
  • Douglas Marcouiller


This article presents a general equilibrium two-country Ricardian trade model with endogenous transactions costs that arise from individual utility-maximizing allocation of labor to production and piracy. In the absence of institutions for risk sharing and coordination of defense, autarky obtains over most of the parameter space. When both trade and predation are supported in equilibrium, terms of trade effects can make security immiserizing. In that case, paradoxically, predation creates trade. Copyright 2005 by the Economics Department Of The University Of Pennsylvania And Osaka University Institute Of Social And Economic Research Association.

Suggested Citation

  • James E. Anderson & Douglas Marcouiller, 2005. "Anarchy And Autarky: Endogenous Predation As A Barrier To Trade," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 46(1), pages 189-213, February.
  • Handle: RePEc:ier:iecrev:v:46:y:2005:i:1:p:189-213

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    References listed on IDEAS

    1. David L. Hummels & Georg Schaur, 2013. "Time as a Trade Barrier," American Economic Review, American Economic Association, vol. 103(7), pages 2935-2959, December.
    2. Skaperdas, Stergios, 1992. "Cooperation, Conflict, and Power in the Absence of Property Rights," American Economic Review, American Economic Association, vol. 82(4), pages 720-739, September.
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    5. Trefler, Daniel, 1995. "The Case of the Missing Trade and Other Mysteries," American Economic Review, American Economic Association, vol. 85(5), pages 1029-1046, December.
    6. Stergios Skaperdas & Constantinos Syropoulos, 2001. "Guns, Butter, and Openness: On the Relationship between Security and Trade," American Economic Review, American Economic Association, vol. 91(2), pages 353-357, May.
    7. Dani Rodrik, 2000. "How Far Will International Economic Integration Go?," Journal of Economic Perspectives, American Economic Association, vol. 14(1), pages 177-186, Winter.
    8. Anderton, Charles H & Anderton, Roxane A & Carter, John R, 1999. "Economic Activity in the Shadow of Conflict," Economic Inquiry, Western Economic Association International, vol. 37(1), pages 166-179, January.
    9. Rauch, James E., 1999. "Networks versus markets in international trade," Journal of International Economics, Elsevier, vol. 48(1), pages 7-35, June.
    10. James E. Rauch & Vitor Trindade, 2002. "Ethnic Chinese Networks In International Trade," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 116-130, February.
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    Cited by:

    1. Anderton, Charles H. & Carter, John R., 2008. "Vulnerable trade: The dark side of an Edgeworth box," Journal of Economic Behavior & Organization, Elsevier, vol. 68(2), pages 422-432, November.
    2. Sami Bensassi & Inmaculada Martínez-Zarzoso, 2012. "How Costly is Modern Maritime Piracy to the International Community?," Review of International Economics, Wiley Blackwell, vol. 20(5), pages 869-883, November.
    3. Arghya Ghosh & Peter Robertson, 2012. "Trade and expropriation," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 50(1), pages 169-191, May.
    4. Garfinkel, Michelle R. & Skaperdas, Stergios & Syropoulos, Constantinos, 2015. "Trade and insecure resources," Journal of International Economics, Elsevier, vol. 95(1), pages 98-114.
    5. Garfinkel, Michelle R. & Skaperdas, Stergios, 2007. "Economics of Conflict: An Overview," Handbook of Defense Economics, Elsevier.
    6. Vincenzo Bove & Leandro Elia & Petros G. Sekeris, 2014. "US Security Strategy and the Gains from Bilateral Trade," Review of International Economics, Wiley Blackwell, vol. 22(5), pages 863-885, November.
    7. Mehrdad Vahabi, 2009. "A Critical Review of Strategic Conflict Theory and Socio-political Instability Models," Revue d'économie politique, Dalloz, vol. 119(6), pages 817-858.
    8. Anderton,Charles H. & Carter,John R., 2009. "Principles of Conflict Economics," Cambridge Books, Cambridge University Press, number 9780521875578, March.
    9. Magnus Hoffmann, 2010. "Enforcement of property rights in a barter economy," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 34(2), pages 249-263, February.
    10. Benjamin Powell & Edward Stringham, 2009. "Public choice and the economic analysis of anarchy: a survey," Public Choice, Springer, vol. 140(3), pages 503-538, September.
    11. Guha, Brishti & Guha, Ashok S., 2011. "Pirates and traders: Some economics of pirate-infested seas," Economics Letters, Elsevier, vol. 111(2), pages 147-150, May.
    12. Mirza, Daniel & Verdier, Thierry, 2008. "International trade, security and transnational terrorism: Theory and a survey of empirics," Journal of Comparative Economics, Elsevier, vol. 36(2), pages 179-194, June.
    13. Mehrdad Vahabi, 2011. "Appropriation, violent enforcement, and transaction costs: a critical survey," Public Choice, Springer, vol. 147(1), pages 227-253, April.
    14. James E. Anderson, 2008. "Economic Integration and the Civilising Commerce Hypothesis," The World Economy, Wiley Blackwell, vol. 31(1), pages 141-157, January.
    15. Michelle R. Garfinkel & Stergios Skaperdas & Constantinos Syropoulos, 2009. "International Trade and Transnational Insecurity: How Comparative Advantage and Power are Jointly Determined," Working Papers 080921, University of California-Irvine, Department of Economics.
    16. Syropoulos, Constantinos & Zylkin, Thomas, 2015. "The Problem of Peace: A Story of Corruption, Destruction, and Rebellion," School of Economics Working Paper Series 2015-5, LeBow College of Business, Drexel University.
    17. Anderson, James E. & Bandiera, Oriana, 2006. "Traders, cops and robbers," Journal of International Economics, Elsevier, vol. 70(1), pages 197-215, September.
    18. Hoffmann, Magnus, 2006. "Enforcement of Property Rights in a Barter Economy," MPRA Paper 3260, University Library of Munich, Germany.
    19. Inmaculada Martínez-Zarzoso & Sami Bensassi, 2013. "The Price Of Modern Maritime Piracy," Defence and Peace Economics, Taylor & Francis Journals, vol. 24(5), pages 397-418, October.
    20. Pierre-Guillaume Méon & Khalid Sekkat, 2008. "Institutional Quality And Trade: Which Institutions? Which Trade?," Economic Inquiry, Western Economic Association International, vol. 46(2), pages 227-240, April.
    21. Guha, Brishti, 2012. "Pirates and fishermen: Is less patrolling always bad?," Journal of Economic Behavior & Organization, Elsevier, vol. 81(1), pages 29-38.
    22. Garfinkel , Michelle & Skaperdas, Stergios & Syropoulos, Constantinos, 2012. "Trade and Insecure Resources: Implications for Welfare and Comparative Advantage," School of Economics Working Paper Series 2012-8, LeBow College of Business, Drexel University.
    23. James E. Anderson, 2006. "Commercial Policy in a Predatory World," NBER Working Papers 12576, National Bureau of Economic Research, Inc.
    24. D'Souza, Anna, 2012. "The OECD Anti-Bribery Convention: Changing the currents of trade," Journal of Development Economics, Elsevier, vol. 97(1), pages 73-87.

    More about this item

    JEL classification:

    • F1 - International Economics - - Trade
    • D5 - Microeconomics - - General Equilibrium and Disequilibrium
    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies


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