This preview shows pages 1–2. Sign up to view the full content.
This preview has intentionally blurred sections. Sign up to view the full version.View Full Document
Unformatted text preview: Political Economy of Trade From Last time When there is a deadline and any kind of deal is better than no deal at all, the last person to make an offer will be able to capture most of the gains from trade. So, in the class example, Hotspur got to make the take-it-or-leave it offer on how to divide $90. He could propose a $89/$1 split. Mortimer knows all this so, at the first stage, he offers Hotspur $90 of the $100 to be divided. Hotspur accepts and both are better off than with the $89/$1 split. How will the dominant pig remain dominant if the subordinate pig always gets the better deal? In a one-time game, this isn't a concern. In a repeated game, the dominant pig and the subordinate pig could eventually reverse roles or find themselves evenly matched and in a Prisoners' Dilemma. Do other countries have plans similar to Super 301? I don't know, but I assume they do. History of Trade Policy Tariffs were originally designed for revenue. The U.S. used a tariff of 5% as its earliest source of Tariffs were originally designed for revenue....
View Full Document
This note was uploaded on 11/22/2011 for the course FIN FIN1100 taught by Professor Bradrifkin during the Fall '09 term at Broward College.
- Fall '09
- Personal Finance