Preferential trade liberalization with endogenous cartel discipline: Implications for trade and welfare

• Published in: The Canadian journal of economics Vol. 57; no. 4; pp. 1109 - 1136
• Main Authors: Agnosteva, Delina E., Syropoulos, Constantinos, Yotov, Yoto V.
• Format: Journal Article
• Language: English
• Published: Malden Blackwell Publishing Ltd 01.11.2024
• Subjects: Accords; Cartels; Effects; Endogenous; Free trade; Indirect effects; International trade; Markets; Sales; Trade agreements; Trade liberalization; Welfare

We consider an international cartel whose members interact repeatedly in their own as well as in third‐country markets. Cartel discipline—an inverse measure of the degree of competition between firms—is endogenously determined by the cartel's incentive compatibility constraint, which strategica...