Whom to send to Doha? The Short-sighted Ones!

Title data

Larch, Mario ; Lechthaler, Wolfgang:
Whom to send to Doha? The Short-sighted Ones!
In: Review of Economic Dynamics. Vol. 16 (2013) Issue 4 . - pp. 634-649.
ISSN 1094-2025
DOI: https://doi.org/10.1016/j.red.2012.10.006

Abstract in another language

Why are empirically observed tariffs so much lower than theoretically calculated Nash-equilibrium tariffs? We argue that this gap can be narrowed by using a dynamic model instead of a static model. This approach has two advantages. (i) It allows us to take account of the transitional process after a change in tariffs. (ii) It allows us to take account of the shortsightedness of policy makers. We show that Nash-equilibrium tariffs based on a dynamic trade model are lower than Nash-equilibrium tariffs based on a static model. We also show that shortsighted politicians tend to set lower tariffs than politicians with a long planning horizon.

Further data

Item Type:	Article in a journal
Refereed:	Yes
Keywords:	Nash-equilibrium tariffs; static; dynamic
Subject classification:	F11, F12, F13
Institutions of the University:	Faculties > Faculty of Law, Business and Economics > Department of Economics > Lehrstuhl Volkswirtschaftslehre VI: Empirische Wirtschaftsforschung Faculties > Faculty of Law, Business and Economics > Department of Economics > Lehrstuhl Volkswirtschaftslehre VI: Empirische Wirtschaftsforschung > Lehrstuhl für Volkswirtschaftslehre VI: Empirische Wirtschaftsforschung - Univ.-Prof. Dr. Mario Larch Faculties Faculties > Faculty of Law, Business and Economics Faculties > Faculty of Law, Business and Economics > Department of Economics
Result of work at the UBT:	Yes
DDC Subjects:	300 Social sciences > 330 Economics
Date Deposited:	15 Oct 2015 10:54
Last Modified:	15 Oct 2015 10:54
URI:	https://eref.uni-bayreuth.de/id/eprint/16665