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State Trading Companies, Time Inconsistency, Imperfect Enforceability and Reputation

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  • Tigran A. Melkonian
  • Stanley R. Johnson

Abstract

Strategic trade in international markets is important for agricultural and other basic commodities. State trading companies (STCs) and large private firms control most of the trade volume. In this study the authors use concepts of modern game theory to treat time inconsistency issues associated with strategic trade. The results are particularly applicable to trade in commodities with lengthy production periods, such as agriculture. The model considered here provides an important context for exploring impacts of signaling, reputation, and third party interventions that approximate the institutions and authorities that govern international trade.

Suggested Citation

  • Tigran A. Melkonian & Stanley R. Johnson, 1998. "State Trading Companies, Time Inconsistency, Imperfect Enforceability and Reputation," Center for Agricultural and Rural Development (CARD) Publications 98-wp192, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    • Handle: RePEc:ias:cpaper:98-wp192
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    References listed on IDEAS

    as
    1. Milgrom, Paul & Roberts, John, 1982. "Predation, reputation, and entry deterrence," Journal of Economic Theory, Elsevier, vol. 27(2), pages 280-312, August.
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    Cited by:

    1. Hossain, Ferdaus & Jensen, Helen H., 2000. "Lithuania's food demand during economic transition," Agricultural Economics, Blackwell, vol. 23(1), pages 31-40, June.
    2. Melkonian, Tigran A., 1998. "Two essays on reputation effects in economic models," ISU General Staff Papers 1998010108000012873, Iowa State University, Department of Economics.

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