The Theory of Optimal Delegation With an Application to Tariff Caps

By Manuel Amador, K. Bagwell. Econometrica, 2013

220 citations recorded by the source corpus.

We consider a general representation of the delegation problem, with and without money burning, and provide sufficient and necessary conditions under which an interval allocation is optimal. We also apply our results to the theory of trade agreements among privately informed governments. For both perfect and monopolistic competition settings, we provide conditions under which tariff caps are optimal. [PUBLICATION ABSTRACT]

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/4c6a9499524c1e57c8c45adca86d4be65910b784

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In Economics and Econometrics

1. Ning Meng
2. Huasheng Song
3. Meredith A. Crowley
4. Kyle Handley
5. Joseph B. Steinberg
6. D. Novy
7. Alan M. Taylor

Citations in the corpus

• Tariff scares: Trade policy uncertainty and foreign market entry by Chinese firms (2018, background): “ments that permit downward flexibility are welfare-superior to exact level commitments (Amador and Bagwell (2013) and Beshkar and Bond (2016a)).”
• Exporting under trade policy uncertainty: Theory and evidence (2014, background): “” The use of tariff bindings and the existence of gaps between applied and binding rates are a feature of optimal trade agreements (Amador and Bagwell, 2011).”
• Is the WTO Passé (2015, unknown): “Amador and Bagwell (2013) move beyond the partial-equilibrium model with perfect competition and use their main propositions to establish conditions under which a tari¤ cap is also optimal for a monopolistic-competition model of trade with a xed number of rms. (Ossa, 2012, explores a similar model…”