Policy linkage and uncertainty in international agreements

Josh Ederington

Research output: Contribution to journalArticlepeer-review

7 Scopus citations

Abstract

This article uses noncooperative game theory to analyze the potential benefits of linking trade agreements to agreements covering domestic policies in a world of uncertainty. I show that nonlinkage is more desirable if there is a positive probability that a country will erroneously believe that its trading partner is cheating on the agreement (triggering an unnecessary punishment phase). In contrast, linkage is more desirable if there is a positive probability that cheating will go unnoticed. (JEL F1, F13, K33, H2).

Original languageEnglish
Pages (from-to)305-317
Number of pages13
JournalEconomic Inquiry
Volume41
Issue number2
DOIs
StatePublished - Apr 2003

ASJC Scopus subject areas

  • General Business, Management and Accounting
  • Economics and Econometrics

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