NDLI: Tariff Revenue and Tariff Caps

Content Provider	Semantic Scholar
Author	Amador, Manuel Bagwell, Kyle
Copyright Year	2012
Abstract	We characterize the design of an optimal trade agreement when governments are privately informed about the value of tariff revenue. We show that the problem of designing an optimal trade agreement in this setting can be represented as an optimal delegation problem when a money burning instrument is available. In a specification with quadratic payoffs and a uniform distribution, we find that the tariff cap and the probability of binding overhang are higher when the upper bound of the support distribution is higher and when the support distribution has greater width.
Starting Page	459
Ending Page	465
Page Count	7
File Format	PDF HTM / HTML
DOI	10.1257/aer.102.3.459
Alternate Webpage(s)	http://www.aeaweb.org/aea/2012conference/program/retrieve.php?pdfid=464
Alternate Webpage(s)	https://www.aeaweb.org/conference/2012/retrieve.php?pdfid=464
Alternate Webpage(s)	https://kbagwell.people.stanford.edu/sites/g/files/sbiybj3371/f/aer.102.3.pdf
Alternate Webpage(s)	https://doi.org/10.1257/aer.102.3.459
Volume Number	102
Language	English
Access Restriction	Open
Content Type	Text
Resource Type	Article

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