Trade Agreements as Endogenously Incomplete Contracts
We propose a model of trade agreements in which contracting is costly, and as a consequence the optimal agreement may be incomplete. In spite of its simplicity, the model yields rich predictions on the structure of the optimal trade agreement and how this depends on the fundamentals of the contracting environment. We argue that taking contracting costs explicitly into account can help explain a number of key features of real trade agreements.
Published Versions
Henrik Horn & Giovanni Maggi & Robert W. Staiger, 2010.
"Trade Agreements as Endogenously Incomplete Contracts,"
American Economic Review,
American Economic Association, vol. 100(1), pages 394-419, March.
citation courtesy of 
More from NBER
In addition to working papers, the NBER disseminates affiliates’ latest findings through a range of free periodicals — the NBER Reporter, the NBER Digest, the Bulletin on Retirement and Disability, the Bulletin on Health, and the Bulletin on Entrepreneurship — as well as online conference reports, video lectures, and interviews.
