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Dynamic Tariff Games with Imperfect Observability
Book chapter

Dynamic Tariff Games with Imperfect Observability

Andreas Blume and Raymond Riezman
Problems of coordination in economic activity, pp.185-205
Recent Economic Thought Series, v. 35, Kluwer Academic Publishers
1994
DOI: 10.1007/978-94-011-1398-4_9

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Abstract

As observable tariffs come down, hidden protection becomes increasingly important. There is strong intuition that imperfect observability of actions e.g., in the form of hidden protection, may impede the attainment of efficiency in trade between countries even if the trading relationship is not of short duration. It is also well known that imperfect observability per se need not lead to inefficiency in repeated relationships. This suggests the following questions. What makes the tariff problem distinct from other repeated relationships? Does this distinction make it harder to achieve efficiency? How does one model this distinction formally? Are there policies to address these problems? Are these policies simple?
Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior (D72) Tariff Trade Policy, International Trade Organizations (F13)

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