Perfect Equilibria in a Trade Liberalization Game
The credibility of temporary protection is examined in a simple infinite horizon, perfect information game of timing in which the domestic government uses the threat of future liberalization to induce the domestic firm to invest. All pure strategy subgame-perfect equilibria are cyclical and, surprisingly, one of them implements optimal temporary protection. However, this equilibrium fails to pass another credibility criterion called "renegotiation-proof." The game has a unique stationary subgame-perfect equilibrium in mixed strategies. Copyright 1990 by American Economic Association.
(This abstract was borrowed from another version of this item.)
|Date of creation:||Apr 1987|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.kellogg.northwestern.edu/research/math/
More information through EDIRC
|Order Information:|| Email: |
When requesting a correction, please mention this item's handle: RePEc:nwu:cmsems:738. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Fran Walker)
If references are entirely missing, you can add them using this form.