 | Professor of Economics, Stanford University Verified email at stanford.edu Cited by 7085 |
Despite the important roel played by GATT in the world economy, economist have nto
developed a unified theoretical framework that interprets and evaluates the principles that
form the foundation of GATT. Our purpose here is to propose such a framework. Working ...
World trade is governed by the rules of the World Trade Organization (WTO), the successor
to the General Agreement on Tariffs and Trade (GATT). The WTO sets rules of conduct for
the international trade of goods and services and for intellectual property rights, provides a ...
K Bagwell… - The American Economic Review, 1991 - JSTOR
High and declining prices signal a high-quality product. High prices are the efficient means
of signaling, because the consequent loss of sales volume is most damaging for lower-cost,
lower-quality products. As time passes and the number of informed consumers increases, ...
This paper proposes a theory that predicts low levels of protection during periods of" normal"
trade volume coupled with episodes of" special" protection when trade volumes surge. This
dynamic pattern of protection emerges from a model in which countries choose levels of ...
S Athey… - RAND Journal of Economics, 2001 - JSTOR
We analyze collusion in an infinitely repeated Bertrand game, where prices are publicly
observed and each firm receives a privately observed, iid cost shock in each period.
Productive efficiency is possible only if high-cost firms relinquish market share. In the most ...
S Athey,
K Bagwell… - Review of Economic …, 2004 - Wiley Online Library
We consider an infinitely repeated Bertrand game, in which prices are publicly observed and
each firm receives a privately observed, iid cost shock in each period. We focus on
symmetric perfect public equilibria, wherein any “punishments” are borne equally by all ...
We explore the impact of the formation of regional free trade agreements on the ability of
countries to maintain low cooperative multilateral tariffs. We assume that countries can not
make binding international commitments, but are instead limited to self-enforcing ...
K Bagwell - Games and Economic Behavior, 1995 - Elsevier
Models of commitment make two assumptions: there is a first mover, and his action is
perfectly observed by the subsequent mover. The purpose of this paper is to disentangle
these two assumptions, in order to see if a strategic benefit from commitment remains ...
To what extent must nations cede control over their economic and social policies if global
efficiency is to be achieved in an interdependent world? This question is at the center of the
debate over the future role of GATT (and its successor, the WTO) in the realm of labor and ...
K Bagwell - Handbook of industrial organization, 2005 - academiccommons.columbia.edu
3. Empirical Regularities (pages 25-54) 3.1. The Direct Effects of Advertising 3.1.1. Sales
3.1.2. Brand Loyalty and Market-Share Stability 3.1.3. Advertising Scale Economies 3.2. The
Indirect Effects of Advertising 3.2.1. Concentration 3.2.2. Profit 3.2.3. Entry 3.2.4. Price ...
K Bagwell - Handbook of industrial organization, 2007 - Elsevier
This chapter offers a comprehensive survey of the economic analysis of advertising. A first
objective is to organize the literature in a manner that clarifies what is known. A second
objective is to clarify how this knowledge has been obtained. The chapter begins with a ...
K Bagwell… - Journal of International Economics, 1997 - Elsevier
We study the implications of customs-union formation for multilateral tariff cooperation. We
model cooperation in multilateral trade policy as self-enforcing, in that it involves balancing
the current gains from deviating unilaterally from an agreed-upon trade policy against the ...
ABSTRACT We evaluate the sensitivity of the case for an R & D subsidy in an export sector
when the outcome of R & D is uncertain and when the resulting product market is
oligopolistic. Investments in R & D are assumed to induce either first order or mean- ...
K Bagwell… - The American Economic Review, 1994 - JSTOR
We introduce a model of the retail firm in which consumers and active firms benefit
collectively from coordination of sales at fewer firms. Using this model, we show that
ostensibly uninformative advertising plays a key role in bringing about coordination ...
We present a theory of collusive pricing in markets subject to business cycle fluctuations. In
the business cycle model that we adopt, market demand alternates stochastically between
fast-growth (boom) and slow-growth (recession) phases. We provide a complete ...
We consider a 3 country world in which each country's import market is served by competing
exporters from its 2 trading partners. We assume that weak multilateral enforcement
mechanisms prevent governments from implementing efficient trade policies through a ...
K Bagwell… - The Rand Journal of Economics, 1988 - JSTOR
We enrich Milgrom and Roberts'(1982) limit-pricing model to allow an incumbent to signal
his costs with both price and advertisements. Our fundamental result is that a cost-reducing
distortion occurs, in that the incumbent behaves as if there were complete information but ...
K Bagwell… - The Rand Journal of Economics, 1991 - JSTOR
We expand Milgrom and Roberts'(1982) limit pricing model to allow for multiple incumbents.
Each incumbent is informed as to the level of an industry cost parameter and selects a
preentry price while a single entrant observes each incumbent's preentry price. We find ...
K Bagwell… - The Economic Journal, 1998 - Wiley Online Library
Is bilateralism bad? This question was the title of Paul Krugman's provocative paper on
regionalism (Krugman, 1991a), and the pursuit of an answer has spawned the regionalism
versus multilateralism debate. The answer to this question turns largely on how one ...
K Bagwell… - Journal of International Economics, 1989 - Elsevier
Abstract We explore the role of export subsidies when foreign goods are initially of unknown
quality to domestic consumers. Absent export subsidies, entry of high quality firms may be
blocked by their inability to sell at prices reflecting their true quality. Export subsidies can ...
K Bagwell… - The Journal of Economic Perspectives, 2001 - JSTOR
C an the World Trade Organization (WTO) play a constructive role in the attainment of sound
labor and environmental policies? Many labor and environmental groups claim that it
cannot, or at least not in its current form. To these groups, the WTO and its predecessor, ...
K Bagwell… - Journal of International Economics, 2005 - Elsevier
Trade negotiations occur through time and between the governments of many countries. An
important issue is thus whether the value of concessions that a government wins in a current
negotiation may be eroded in a future bilateral negotiation to which it is not party. We ...
K Bagwell… - The Journal of Legal Studies, 2005 - JSTOR
Abstract We consider the design and implementation of international trade agreements
when (a) negotiations occur in the presence of uncertainty about future political
pressures,(b) governments possess private information about political pressures at the ...
We describe recent work on the theory of trade agreements that speaks to the purpose and
design of GATT. Our discussion proceeds in three steps. First, we examine the purpose of a
trade agreement. In both the traditional economic and the political-economy approaches ...
K Bagwell… - European Journal of Political Economy, 2001 - Elsevier
We present a framework for understanding and interpreting reciprocity and non-
discrimination, the two principles that are the pillars of the multilateral trading system as
embodied in GATT and its successor, the WTO. We show that the principle of reciprocity ...
K Bagwell… - The Review of Economic Studies, 1994 - restud.oxfordjournals.org
Abstract When market information such as price is difficult to communicate, consumers and
firms may be unable to take advantage of mutually beneficial scale economies, so that
coordination failures arise. Ostensibly uninformative advertising expenditures can be used ...
K Bagwell - The American Economic Review, 1991 - JSTOR
A new welfare-enhancing role is identified for a policy of export subsidization in a new-
product industry. An export-subsidy policy promotes the (rational) perception that a high-
quality export can be provided at a relatively low price. Thus, an export subsidy generates ...
K Bagwell - The Review of Economic Studies, 1987 - restud.oxfordjournals.org
Abstract A two-period game between firms and consumers is considered. Firms are privately
informed about their individual costs, and consumers must pay a search cost in order to
learn a firm's current price. Consumers thus have incentive to use introductory price as a ...
Why have governments found reciprocal trade agreements such as GATT to be a more
effective means of facilitating trade liberalization than unilateral initiatives? We provide in
this paper an analytic framework for the study of reciprocal trade agreements. We use this ...
K Bagwell… - International Journal of Industrial Organization, 1990 - Elsevier
Abstract We consider the advertising and pricing strategies of an incumbent firm who is
concerned with deterring or accommodating entry and privately informed as to the level of
market demand. Our fundamental result is that a demand-exaggerating distortion occurs: if ...
K Bagwell, G Ramey… - The RAND Journal of Economics, 1997 - JSTOR
We develop a model of retail competition in which retailers select prices and investments in
cost reduction. An equilibrium is constructed in which several identical firms enter and then
engage in a phase of vigorous price competition. This phase is concluded with a" ...
K Bagwell - Journal of Economics & Management Strategy, 1992 - Wiley Online Library
This paper offcrs a general characterization of the optimal product line prices for a monopolist
whose quality of products is initially unkriouiiz to consumers. In the focal equilibrium, a monopolist
signals a high-quality product line by pricing as if quality were knozun to be high, but ...
S Athey… - Econometrica, 2008 - Wiley Online Library
We consider a dynamic Bertrand game in which prices are publicly observed and each firm
receives a privately observed cost shock in each period. Although cost shocks are
independent across firms, within a firm costs follow a first-order Markov process. We ...
[CITATION] The economics of advertising
K Bagwell - 2001 - Edward Elgar Reference Collection
K Bagwell… - Economics & Politics, 2001 - Wiley Online Library
The primary predictions of strategic-trade theory are not restricted to imperfectly competitive
markets. Indeed, these predictions emerge in a natural three-country extension of the
traditional theory of trade policy in competitive markets, once the theory is augmented to ...
How should the issue of domestic labor standards be handled in the GATT/WTO? This
question is part of a broader debate over the appropriate scope of international economic
institutions such as the GATT, where member-countries are considering proposals for a ...
ABSTRACT We characterize the strategic and corrective role for R&D subsidies in an export
market where R & D is an uncertain process and where the winner of the R&D competition
monopolizes the market. Investments in R & D are assumed to induce either first order or ...
K Bagwell - International Journal of Industrial Organization, 1990 - Elsevier
Abstract In a market for experience goods, the products of an incumbent firm and a new
entrant are informationally differentiated. A signalling model is analyzed, and it is shown that
informational product differentiation can be a barrier to entry (even under 'pro-entry' ...
K Bagwell… - The Rand Journal of Economics, 1996 - JSTOR
When avoidable fixed costs are introduced into the entry model of Dixit (1980) and Ware
(1984), there arises a coordination problem in selecting among postentry Nash equilibria.
Elimination of weakly dominated strategies allows the entrant to use a market-capturing ...
Trade negotiations occur through time and between the governments of many countries. An
important issue is thus whether the value of concessions that a government wins in a current
negotiation may be eroded in a future bilateral negotiation to which it is not party. In the ...
What do trade negotiators negotiate about? There are two distinct theoretical approaches in
the economics literature that offer an answer to this question: the terms-of-trade theory and
the commitment theory. The terms-of-trade theory holds that trade agreements are useful ...
K Bagwell… - Advances in Economic Analysis & Policy, 2003 - degruyter.com
Empirical studies have repeatedly documented the countercyclical nature of trade barriers.
In this paper, we propose a simple theoretical framework that is consistent with this and
other empirical regularities in the relationship between protection and the business cycle. ...
It has been four years since the process leading to the reform of the Dispute Settlement
Understanding (DSU) was initiated. The Ministerial Conference in Doha provided the legal
mandate to do so. Negotiations started in early March 2002 and were supposed to be ...
A prominent problem with the WTO dispute settlement procedures is the practical difficulty
faced by small and developing countries in finding the capacity to effectively retaliate against
trading partners that are in violation of their WTO commitments. In light of this problem, ...
K Bagwell… - The American economic review, 2006 - JSTOR
International disputes over subsidies have become a prominent feature of the world trading
system. The creation of the World Trade Organization (WTO) as a successor to the General
Agreement on Tariffs and Trade (GATT) was nearly prevented by disputes in the Uruguay ...
K Bagwell… - The American Economic Review, 2011 - ingentaconnect.com
Abstract: According to the terms-of-trade theory, governments use trade agreements to
escape from a terms-of-trade-driven prisoner's dilemma. We use the terms-of-trade theory to
develop a relationship that predicts negotiated tariff levels on the basis of pre-negotiation ...
K Bagwell, A Wolinsky - Handbook of Game Theory with Economic …, 2002 - Elsevier
Abstract In this article, we consider how important developments in game theory have
contributed to the theory of industrial organization. Our goal is not to survey the theory of
industrial organization; rather, we consider the contribution of game theory through a ...
K Bagwell… - Japan and the World Economy, 1997 - Elsevier
Why do governments seek restrictions on the use of export subsidies through reciprocal
trade agreements such as GATT? In this paper, we emphasize that subsidy competition
between governments can serve to coordinate the entry decisions of firms, finding that ...
This paper considers self-enforcing trade agreements among privately informed
governments. A trade agreement that uses weak bindings (ie, maximal tariff levels) is shown
to offer advantages relative to a trade agreement that uses strong bindings (ie, precise ...
and non-discrimination, the two principles that are the pillars of the multi-lateral trading
system as embodied in GATT and its successor, the WTO. We show that GATT's principle of
reciprocity serves to neutralize the world-price effects of a country's trade policy decisions, ...
International disputes over subsidies are increasingly disrupting the world trading system.
The creation of the WTO was nearly prevented by disputes in the Uruguay Round of GATT
negotiations over the issue of negotiating disciplines on agricultural subsidies, an issue ...
K Bagwell… - Journal of Economics & Management …, 1993 - Wiley Online Library
We consider communication of quality via cheap talk and dissipative advertising
expenditures, when consumers have heterogeneous tastes for quality, and price information
must be acquired through costly search. For search pods, cheap talk communicates ...
K Bagwell… - The American Economist, 2002 - JSTOR
Over the past 50 years, a remarkable degree of trade liberalization has been achieved
through GATT/WTO negotiations. In this paper, we describe work that provides a theoretical
interpretation of this institution. We emphasize two key features of GATT/WTO: reciprocity ...
K Bagwell… - 2007 - academiccommons.columbia.edu
The WTO dispute settlement system represents a major achievement of the Uruguay Round.
By most accounts, this system has worked very well. In the ongoing dispute settlement
understanding (DSU) review, WTO Members are considering proposals that might lead to ...
A Abdulkadiroglu… - Proceedings of University of Maryland, …, 2005 - econ.tau.ac.il
Abstract We study trust, reciprocity and favors in a repeated trust game with private
information. In our main analysis, players are willing to exhibit trust and thereby facilitate
cooperative gains only if such behavior is regarded as a favor that must be reciprocated, ...
K Bagwell, MH Riordan… - 1986 - kelloggexecutives.com
Abstract Equilibrium price dynamics for an experience good monopolist depends on the
evolution of the ratio of informed to uninformed consumers. Consumers use prices and
possibly firm age as signals of quality. Under a variety of informational assumptions, the ...
[CITATION] VThe Economic Analysis of Advertising
K Bagwell - V Handbook of Industrial Orga $ nization, 2007
K Bagwell, PC Mavroidis… - Journal of International Economics, 2007 - Elsevier
We offer a first formal analysis of auctioning retaliation rights within the WTO. We show that
the auctions exhibit externalities among bidders, and we characterize equilibrium bidder
behavior under alternative auction formats. If the violating country is prevented from ...
[CITATION] Is everything neutral?
K Bagwell… - Journal of Political, 1988
We consider the purpose and design of trade agreements in imperfectly competitive
environments featuring firm-delocation effects. In both the segmented-market Cournot and
the integrated-market monopolistic competition settings where these effects have been ...
What are the sovereign rights of nations in an interdependent world, and to what extent do
these rights stand in the way of achieving important international objectives? These two
questions rest at the heart of contemporary debate over the role and design of ...
S Athey… - Discussion Papers, 2004 - academiccommons.columbia.edu
Abstract We consider a dynamic Bertrand game, in which prices are publicly observed and
each firm receives a privately observed cost shock in each period. Although cost shocks are
independent across firms, within a firm costs follow a first/order Markov process. We ...
K Bagwell - The Economics of Advertising, 2001 - stanford.edu
Advertising is a prominent feature of modern economic life. Consumers encounter
advertising messages as they watch TV, read magazines, listen to the radio, surf the internet,
or simply walk down the street. And the associated advertising expenditures can be huge. ...
K Bagwell… - Baldwin et al, 1999 - books.google.com
Are preferential agreements at odds with the multilateral trading system? This is a question
of fundamental importance to the design of the GATT-WTO system. And it is a question that
has become increasingly pressing as more countries negotiate free trade agreements ( ...
Abstract: We consider an infinitely-repeated Bertrand game, in which prices are perfectly
observed and each firm receives a privately-observed, iid cost shock in each period. In our
base model, side-payments are prohibited. In order for a cartel to achieve productive ...
[CITATION] It'sa Question of Market Access'(2002)
K Bagwell, PC Mavroidis… - American Journal of International Law
K Bagwell - The RAND Journal of Economics, 2007 - Wiley Online Library
I consider whether a privately informed incumbent can use limit pricing and upward
distortions in advertising to deter profitable entry. Profitable entry is not deterred when the
incumbent is privately informed only about its cost type. Profitable entry may be deterred, ...
K Bagwell… - Japan and the World Economy, 2003 - Elsevier
This paper explores the informational role of plant location decisions for the multinational
enterprise. When information about costs is incomplete, the location of a plant will be chosen
not only for its impact on actual production costs, but also for its impact on the perception ...
K Bagwell - Studies in Industry Economics, Discussion …, 1985 - kellogg.northwestern.edu
ABSTRACT In a market for experience goods, the products of an incumbent firm and a new
entrant are informationally differentiated. A signalling model is analyzed, and it is shown that
informational product differentiation can be a barrier to entry (even under" pro-entry" ...
M Amador… - Unpublished working paper, 2010 - stanford.edu
Abstract We consider a model in which governments negotiate a trade agreement while
uncertain about future political pressures. After the agreement is formed and before applying
its import tariff, a government privately observes its political economy parameter. This ...
[CITATION] What Do Trade Negotiators Negotiate About?
ABSTRACT: Recent work has established that firms select excessively risky R&D strategies.
We argue that this conclusion is sensitive to the assumptions that the winner takes all and
that consumers receive no surplus, We relax these assumptions and assume instead that ...
K Bagwell… - World Trade Review, 2004 - ali.org
This paper addresses the dispute brought to the World Trade Organization (WTO) by
Argentina concerning certain Chilean measures affecting the importation of wheat, wheat
flour, oil seeds, edible vegetable oils and sugar. The complaint by Argentina challenged ...
We consider the purpose and design of the World Trade Organization (WTO) and its
predecessor, GATT. We review recent developments in the relevant theoretical and
empirical literature. And we describe the GATT/WTO architecture and briefly trace its ...
When markets are imperfectly competitive, trade policies can alter the terms of trade, shift
profits from one country to another, and moderate or exacerbate existing distortions that are
associated with the presence of monopoly power. In light of the various ways in which ...
K Bagwell - Economica, 2004 - Wiley Online Library
I present a dynamic model of price determination in customer markets that are subject to
exogenous business cycle fluctuations. The business cycle is described in terms of a Markov
process, in which market demand alternates stochastically between fast growth (boom) ...
K Bagwell… - Northwestern University, vISEMS …, 1990 - kellogg.northwestern.edu
We show that when relevant market information such as price is difficult to communicate,
advertising plays a key role in bringing about optimal coordination of purchase behavior: an
efficient firm uses advertising expenditures in place of price to inform sophisticated ...
ABSTRACT Motivated by the structure of WTO negotiations, we analyze a bargaining
environment in which negotiations proceed bilaterally and sequentially under the most-
favored-nation (MFN) principle. We identify backward-stealing and forward-manipulation ...
[CITATION] The Economic Analysis of Advertising, forthcoming in Armstrong, Mark and Robert Porter (eds.), Handbook of Industrial Organization, vol. 3
K Bagwell - 2003 - Amsterdam: North Holland
[CITATION] NATIONAL SOVEREIGNTY AND THE WORLD TRADING SYSTEM Labor, Environment, and the WTO
[CITATION] jDelocation and Trade Agreements in Imperfectly Competitive Markets, kmimeo
K Bagwell… - 2009 - June
K Bagwell, GM LEE - 2008 - ink.library.smu.edu.sg
Abstract We consider non-price advertising by retail… rms that are privately informed as to
their respective production costs. We… rst analyze a static model. We construct an
advertising equi-librium, in which informed consumers use an advertising search rule ...
[CITATION] Forthcoming. Collusion and Price Rigidity
S Athey, K Bagwell… - Review of Economic Studies
We consider the design and implementation of international trade agreements when:(i)
negotiations are undertaken and commitments made in the presence of uncertainty about
future political pressures;(ii) governments possess private information about political ...
[CITATION] The Economics of the World Trading System
B Kyle… - 2002 - MIT Press (Cambridge)
[CITATION] kSelf $ Enforcing Trade Agreements and Private Information, lunpub $ lished manuscript
K Bagwell - 2009 - Stanford University, February
[CITATION] forthcoming.“Multilateral Trade Negotiations, Bilateral Opportunism and the Rules of GATT/WTO.”
K Bagwell… - Journal of International Economics
S Athey… - 2004 - econ.yale.edu
Abstract We consider a game between a fixed set of firms that participate in a series of
procurement auctions over an infinite horizon, where bids are publicly observed and each
firm receives a privately observed cost shock in each period. Although cost shocks are ...
K Bagwell… - Discussion Papers, 1995 - ideas.repec.org
This paper considers pricing, cost-reducing investment and dissipative advertising by firms
when consumers acquire price information via two information channels, observation of
advertising and sequential price search. We find that advertising guides consumers to the ...
K Bagwell… - Northwestern University, Center …, 1996 - kellogg.northwestern.edu
ABSTRACT This paper considers pricing, cost-reducing investment and dissipative
advertising by firms when consumers acquire price information via two information channels,
observation of advertising and sequential price search. We find that advertising guides ...
K Bagwell… - 1988 - europealumni.kellogg.northwestern. …
Abstract In this paper, a repeated search model is studied to determine whether the repeat
nature of sales can be used to limit the monopoly power that firms enjoy when search is
costly. To make matters interesting, we assume that production coasts exhibit decreasing ...
Existing theories of trade agreements suggest that GATT/WTO efforts to reign in export
subsidies represent an inefficient victory for exporting governments that comes at the
expense of importing governments. Building from the Cournot delocation model first ...
K Bagwell, G Ramey… - 1992 - europealumni.kellogg.northwestern. …
Many observed advertisements seem at odds with rational behavior. In a variety of ads,
mostly on TV and radio, multiproduct sellers provide little hard information, choosing instead
to impart only vague slogans that arc suggestive of good deals. Examples arc plentiful: a ...
[CITATION] The Case for Tradeable Remedies in the WTO
K Bagwell, PC Mavroidis… - … . Washington, DC: Palgrave/Mc Millan and …, 2005
[CITATION] In process
K Bagwell… - Subsidy agreements
[CITATION] Staiger+ 2001+ Reciprocity, Non-Discrimination, and Preferential Agreements in the Multilateral Trading System+
K Bagwell… - European Journal of Political Economy
K Bagwell - Journal of Economics & Management Strategy, 1992 - Wiley Online Library
This paper offers a new theory of limit pricing. Incumbents from different markets or regions
“compete” against one another, with each attempting to price in a manner that deflects entry
into the others' markets. An entrant is imperfectly informed as to the incumbents' respective ...
[CITATION] qWhat Do Trade Negotiators Negotiate About
K Bagwell… - Empirical Evidence from the World Trade Organization, …, 2006
[CITATION] The Economic Analysis of Advertising. Ch. 28, 1701-1844
K Bagwell - Handbook of Industrial Organization, III, Eds. Armstrong …, 2007
K Bagwell… - American Economic Review, 1998 - Citeseer
Abstract Despite the important role played by GATT in the world economy, economists have
not developed a unified theoretical framework that interprets and evaluates the principles
that form the foundation of GATT. Our purpose here is to propose such a framework. ...
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