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Reputation and Learning: Japanese Car Exports to the United States

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  • Goksel, Turkmen

Abstract

This paper incorporates learning and reputation building into a simple dynamic stochastic model of international trade with asymmetric information. We use the model to study a bilateral trade flow influenced significantly by learning and reputation, namely U.S. imports of Japanese cars over the period 1961-2005. Numerical simulations replicate the trade flow in a robust fashion. In addition to matching this event, we explore further implications of our framework for understanding international trade patterns. Since learning and reputation building require time, predicted short run trade patterns can be quite different than those predicted in the long run. Sectorial differences in the speed of learning and reputation building affect predicted trade patterns. The extent of asymmetric information existing between importers and exporters also changes under different trade policies.

Suggested Citation

  • Goksel, Turkmen, 2011. "Reputation and Learning: Japanese Car Exports to the United States," MPRA Paper 40805, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:40805
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    File URL: https://mpra.ub.uni-muenchen.de/40805/1/MPRA_paper_40805.pdf
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    References listed on IDEAS

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    Cited by:

    1. Pranab Bardhan & Dilip Mookherjee & Masatoshi Tsumagari, 2013. "Middlemen Margins and Globalization," American Economic Journal: Microeconomics, American Economic Association, vol. 5(4), pages 81-119, November.

    More about this item

    Keywords

    international trade; reputation; learning; asymmetric information; automobile;

    JEL classification:

    • F10 - International Economics - - Trade - - - General

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