Equity-efficiency tradeoffs in international bargaining

Adib Bagh, William Ederington

Research output: Contribution to journalArticlepeer-review

Abstract

This paper analyzes the welfare impact of expanding the negotiation agenda of an international agreement between asymmetric countries (e.g., including specific negotiations over environmental regulations or labor standards in a conventional trade agreement) and demonstrates why such proposed expansions are contentious. A main result is that agenda expansions that provide more bargaining flexibility will increase the efficiency of the agreement but can result in a less equitable agreement that hurts the country that is at a bargaining disadvantage. Similarly, we demonstrate that decreases in bargaining game asymmetry can also make the disadvantaged country worse-off even as it increases global welfare.

Original languageEnglish
Pages (from-to)782-804
Number of pages23
JournalEconomic Inquiry
Volume62
Issue number2
DOIs
StatePublished - Apr 2024

Bibliographical note

Publisher Copyright:
© 2024 The Authors. Economic Inquiry published by Wiley Periodicals LLC on behalf of Western Economic Association International.

Keywords

  • bargaining
  • international agreements
  • issue linkage

ASJC Scopus subject areas

  • General Business, Management and Accounting
  • Economics and Econometrics

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