IDEAS home Printed from https://ideas.repec.org/a/spr/reecde/v26y2022i3d10.1007_s10058-021-00275-2.html
   My bibliography  Save this article

Protectionist demands in globalization

Author

Listed:
  • Arzu Kıbrıs

    (University of Warwick)

  • Özgür Kıbrıs

    (Sabancı University, Orhanlı)

  • Mehmet Yiğit Gürdal

    (Bogazici University)

Abstract

We construct a game theoretic model that offers to explain the increase in trade protectionism as a rational reaction of the voters to their increased concern that the policy choices of their governments are being influenced by international actors. More specifically, we construct a small open economy in which the citizens declare their most preferred tariff rate on an import good to their government. While the government has incentive not to deviate too much from the publicly demanded tariff rate, its final decision is determined after bargaining with a foreign lobby which offers benefits to the government in return of lowered tariffs. We show that the expectation of such foreign influence affects the citizens’ voting behavior. Namely, they tend to vote for more protectionist policies. Moreover, this behavior leads to an increase in benefits by the foreign lobby to the government.

Suggested Citation

  • Arzu Kıbrıs & Özgür Kıbrıs & Mehmet Yiğit Gürdal, 2022. "Protectionist demands in globalization," Review of Economic Design, Springer;Society for Economic Design, vol. 26(3), pages 345-365, September.
    • Handle: RePEc:spr:reecde:v:26:y:2022:i:3:d:10.1007_s10058-021-00275-2
    DOI: 10.1007/s10058-021-00275-2
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10058-021-00275-2
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10058-021-00275-2?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Rubinstein, Ariel, 1982. "Perfect Equilibrium in a Bargaining Model," Econometrica, Econometric Society, vol. 50(1), pages 97-109, January.
    2. Kalai, Ehud & Smorodinsky, Meir, 1975. "Other Solutions to Nash's Bargaining Problem," Econometrica, Econometric Society, vol. 43(3), pages 513-518, May.
    3. Grossman, Gene M & Helpman, Elhanan, 1995. "The Politics of Free-Trade Agreements," American Economic Review, American Economic Association, vol. 85(4), pages 667-690, September.
    4. Mayda, Anna Maria & Rodrik, Dani, 2005. "Why are some people (and countries) more protectionist than others?," European Economic Review, Elsevier, vol. 49(6), pages 1393-1430, August.
    5. Stasavage, David, 2004. "Open-Door or Closed-Door? Transparency in Domestic and International Bargaining," International Organization, Cambridge University Press, vol. 58(4), pages 667-703, October.
    6. Nash, John, 1950. "The Bargaining Problem," Econometrica, Econometric Society, vol. 18(2), pages 155-162, April.
    7. Grossman, Gene M & Helpman, Elhanan, 1994. "Protection for Sale," American Economic Review, American Economic Association, vol. 84(4), pages 833-850, September.
    8. Mayer, Wolfgang, 1984. "Endogenous Tariff Formation," American Economic Review, American Economic Association, vol. 74(5), pages 970-985, December.
    9. Satterthwaite, Mark Allen, 1975. "Strategy-proofness and Arrow's conditions: Existence and correspondence theorems for voting procedures and social welfare functions," Journal of Economic Theory, Elsevier, vol. 10(2), pages 187-217, April.
    10. Dani Rodrik, 1998. "Has Globalization Gone Too Far?," Challenge, Taylor & Francis Journals, vol. 41(2), pages 81-94, March.
    11. Drew Fudenberg & Jean Tirole, 1983. "Sequential Bargaining with Incomplete Information," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 50(2), pages 221-247.
    12. Gibbard, Allan, 1973. "Manipulation of Voting Schemes: A General Result," Econometrica, Econometric Society, vol. 41(4), pages 587-601, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Serkan Kucuksenel & Osman Gulseven, 2020. "Electoral systems and international trade policy," Papers 2003.05725, arXiv.org.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wen Li Cheng & Meng-Chun Liu & Xiaokai Yang, 2005. "A Ricardian Model With Endogenous Comparative Advantage And Endogenous Trade Policy Regimes," World Scientific Book Chapters, in: An Inframarginal Approach To Trade Theory, chapter 7, pages 109-130, World Scientific Publishing Co. Pte. Ltd..
    2. K. H. O'Rourke & R. Sinnott, 2001. "The Determinants of Individual Trade Policy Preferences: International Survey Evidence," Trinity Economics Papers 200110, Trinity College Dublin, Department of Economics.
    3. Joseph Mullat, 2001. "Calculus of Bargaining Solution on Boolean Tables," Economics Bulletin, AccessEcon, vol. 28(15), pages 1.
    4. Xiaokai Yang & Dingsheng Zhang, 2005. "Endogenous Structure Of The Division Of Labor, Endogenous Trade Policy Regime, And A Dual Structure In Economic Development," World Scientific Book Chapters, in: An Inframarginal Approach To Trade Theory, chapter 17, pages 383-406, World Scientific Publishing Co. Pte. Ltd..
    5. Etro, Federico, 2017. "Research in economics and game theory. A 70th anniversary," Research in Economics, Elsevier, vol. 71(1), pages 1-7.
    6. Kotaro Suzumura, 2002. "Introduction to social choice and welfare," Temi di discussione (Economic working papers) 442, Bank of Italy, Economic Research and International Relations Area.
    7. Roberto Serrano, 2003. "The Theory of Implementation of Social Choice Rules," Working Papers 2003-19, Brown University, Department of Economics.
    8. Jinbaek Kim, 2008. "A model and case for supporting participatory public decision making in e-democracy," Group Decision and Negotiation, Springer, vol. 17(3), pages 179-193, May.
    9. Daniele Cassese & Paolo Pin, 2018. "Decentralized Pure Exchange Processes on Networks," Papers 1803.08836, arXiv.org, revised Mar 2022.
    10. Ursula F Ott & Pervez N Ghauri, 2019. "Brexit negotiations: From negotiation space to agreement zones," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 50(1), pages 137-149, February.
    11. Takeuchi, Ai & Veszteg, Róbert F. & Kamijo, Yoshio & Funaki, Yukihiko, 2022. "Bargaining over a jointly produced pie: The effect of the production function on bargaining outcomes," Games and Economic Behavior, Elsevier, vol. 134(C), pages 169-198.
    12. Cadot, Olivier & de Melo, Jaime & Olarreaga, Marcelo, 2001. "Can bilateralism ease the pains of multilateral trade liberalization?," European Economic Review, Elsevier, vol. 45(1), pages 27-44, January.
    13. Yakov Babichenko & Leonard J. Schulman, 2015. "Pareto Efficient Nash Implementation Via Approval Voting," Papers 1502.05238, arXiv.org, revised Mar 2017.
    14. Subhayu Bandyopadhyay & Sajal Lahiri & Howard J. Wall, 2009. "Cross-border lobbying in preferential trading agreements: implications for external tariffs," Working Papers 2009-041, Federal Reserve Bank of St. Louis.
    15. Thiemo Fetzer & Carlo Schwarz, 2021. "Tariffs and Politics: Evidence from Trump’s Trade Wars," The Economic Journal, Royal Economic Society, vol. 131(636), pages 1717-1741.
    16. Laruelle, Annick & Valenciano, Federico, 2007. "Bargaining in committees as an extension of Nash's bargaining theory," Journal of Economic Theory, Elsevier, vol. 132(1), pages 291-305, January.
    17. Pravin Krishna & Devashish Mitra, 2003. "Reciprocated Unilateralism in Trade Policy: An Interest-Group Approach," NBER Working Papers 9631, National Bureau of Economic Research, Inc.
    18. Fabio Galeotti & Maria Montero & Anders Poulsen, 2022. "The Attraction and Compromise Effects in Bargaining: Experimental Evidence," Management Science, INFORMS, vol. 68(4), pages 2987-3007, April.
    19. Bendoly, Elliot & van Wezel, Wout & Bachrach, Daniel G. (ed.), 2015. "The Handbook of Behavioral Operations Management: Social and Psychological Dynamics in Production and Service Settings," OUP Catalogue, Oxford University Press, number 9780199357222, Decembrie.
    20. Binmore, Ken & Osborne, Martin J. & Rubinstein, Ariel, 1992. "Noncooperative models of bargaining," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 1, chapter 7, pages 179-225, Elsevier.

    More about this item

    Keywords

    Open economy; Tariffs; Bargaining; Voting; Manipulation; Bayesian game;
    All these keywords.

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F5 - International Economics - - International Relations, National Security, and International Political Economy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:reecde:v:26:y:2022:i:3:d:10.1007_s10058-021-00275-2. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.