Political economy of preferential trade agreement: the case of bilateral asymmetric negotiation
AUTOR(ES)
Motta, Daniel Augusto
FONTE
Brazilian Journal of Political Economy
DATA DE PUBLICAÇÃO
2007-06
RESUMO
The purpose of this paper is to analyse the political economy of preferential trade agreements based on a sequential non-cooperative Stackelberg political game between a large economy and a small one, in which the political dispute of rival lobby groups defines the unilateral stance of both governments in the first stage; and the Stackelberg "coalition-proof" equilibrium defines the free trade agreement format in the second stage. Finally, a few modifications in the initial game structure are discussed in order to enhance the small economy's negotiation power. The political economy model is applied to FTAA case.
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