MANAGED TRADE WITH IMPERFECT INFORMATION* |
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| Authors: | Gal Hochman Ella Segev |
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| Institution: | 1. University of California at Berkeley, U.S.A.;2. Ben Gurion University, Isreal;3. Please address correspondence to: Gal Hochman, Department of ARE, University of California at Berkeley, Berkeley, CA 94702. E‐mail: . |
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| Abstract: | This article illustrates the importance of imperfect information in self‐enforcing trade agreements. It shows that expected welfare is higher with current period uncertainty, and a high level of uncertainty may even undermine the need for a safeguard clause. These results were derived by extending the seminal paper by Bagwell and Staiger (The American Economic Review 80 (1990), 779–95) to account for current period uncertainty. |
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