Multilateral tariff cooperation under fairness and reciprocity

Costas Hadjiyiannis, Iris Doruk, Chrysostomos Tampakis

Research output: Contribution to journalArticle

2 Citations (Scopus)

Abstract

This paper explores the impact of fairness and reciprocity on multilateral tariff cooperation. Reciprocal countries reward kind behaviour (positive reciprocity), but retaliate against countries behaving unkindly (negative reciprocity). We demonstrate that reciprocal countries that are moderately demanding from their trading partners regarding their commercial policy can support a greater degree of cooperation than self-interested ones. However, when only very liberal import policies are considered fair, then reciprocity could have a detrimental effect on multilateral tariff cooperation.Thus, our model provides a novel perspective on the role of expectations in trade negotiations.
Original languageEnglish
Pages (from-to)925-941
JournalCanadian Journal Of Economics-Revue Canadienne D Economique
Volume45
Issue number3
DOIs
Publication statusPublished - 1 Jan 2012

Keywords

  • World-trade organization
  • Equilibrium
  • Enforcement

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