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Myopic or farsighted: bilateral trade agreements among three symmetric countries
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Journal Article
Myopic or farsighted: bilateral trade agreements among three symmetric countries
2019
Overview
We examine network formation through bilateral trade agreements (BTA) among three symmetric countries. Each government decides whether to form a link or not via a BTA depending on the differential of the ex-post and ex-ante sum of real wages in the country. Setting the governmental decision in two forms, myopic and farsighted, we analyze the resulting network formation. Firstly, we find that both myopic and farsighted games achieve complete networks. Secondly, networks resulting from myopic games coincide with those resulting from farsighted games.
Publisher
Springer Science and Business Media LLC,Springer Berlin Heidelberg,Springer Nature B.V
