Kyle Bagwell

Maskin for providing detailed comments on an earlier draft. We thank Peter Cramton, Glenn (2007)

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...

Susan Athey, Kyle Bagwell, James Hosek, Michihiro K, Wally Mullin, David Pearce, ...

Abstract: We analyze collusion in an inÞnitely repeated Bertrand game, where prices are publicly observed and each Þrm receives a privately observed, i.i.d. cost shock in each period. Productive...

Remedies in the WTO: An economic perspective (2007)

Remedies in the WTO: An economic perspective (2007)

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)...

What do trade negotiators negotiate about? Empirical evidence from the World Trade Organization (2006)

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)...

What do trade negotiators negotiate about? Empirical evidence from the World Trade Organization (2006)

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...

Signaling and entry deterrence: A multi-dimensional analysis (2006)

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...

Signaling and entry deterrence: A multi-dimensional analysis (2006)

This paper considers a long-standing question in the field of Industrial Organization: Can an incumbent firm price and advertise so as to deter entry that otherwise would be profitable? For the most...

The economic analysis of advertising (2005)

This paper considers a long-standing question in the field of Industrial Organization: Can an incumbent firm price and advertise so as to deter entry that otherwise would be profitable? For the most...

The economic analysis of advertising (2005)

By its very nature, advertising is a prominent feature of economic life. Advertising reaches consumers through their TV sets, radios, newspapers, magazines, mailboxes, computers and more. Not...

Trust, reciprocity and favors in cooperative relationships (2005)

By its very nature, advertising is a prominent feature of economic life. Advertising reaches consumers through their TV sets, radios, newspapers, magazines, mailboxes, computers and more. Not...

Abdulkadiroglu, Atila, Bagwell, Kyle

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...

Trust, reciprocity and favors in cooperative relationships (2005)

Abdulkadiroglu, Atila, Bagwell, Kyle

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...

Enforcement, private political pressure and the GATT/WTO escape clause (2005)

Enforcement, private political pressure and the GATT/WTO escape clause (2005)

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;...

Will international rules on subsidies disrupt the world trading system? (2005)

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;...

Bagwell, Kyle, Staiger , Robert W.

We provide a first formal analysis of the international rules that govern the use of subsidies to domestic production. Our analysis highlights the impact of the new disciplines on subsidies that were...

Will international rules on subsidies disrupt the world trading system? (2005)

The case for auctioning countermeasures in the WTO (2004)

We provide a first formal analysis of the international rules that govern the use of subsidies to domestic production. Our analysis highlights the impact of the new disciplines on subsidies that were...

Bagwell, Kyle, Mavroidis, Petros C., Staiger, Robert W.

A major accomplishment of the Uruguay Round of GATT negotiations in creating the World Trade Organization (WTO) was the introduction of new dispute settlement procedures. These procedures were...

Collusion with persistent cost shocks (2004)

Athey, Susan, Bagwell, Kyle

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,...

Backward stealing and forward manipulation in the WTO (2004)

The case for tradable remedies in WTO dispute settlement (2004)

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...

Bagwell, Kyle, Mavroidis, Petros C., Staiger, Robert W.

It has been almost two 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...

The case for auctioning countermeasures in the WTO (2004)

Bagwell, Kyle, Mavroidis, Petros C., Staiger, Robert W.

A major accomplishment of the Uruguay Round of GATT negotiations in creating the World Trade Organization (WTO) was the introduction of new dispute settlement procedures. These procedures were...

Backward stealing and forward manipulation in the WTO (2004)

The case for tradable remedies in WTO dispute settlement (2004)

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...

Bagwell, Kyle, Mavroidis, Petros C., Staiger, Robert W.

It has been almost two 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 (§30)...

Collusion with persistent cost shocks (2004)

Athey, Susan, Bagwell, Kyle

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,...

Collusion and price rigidity (2004)

Susan Athey, Kyle Bagwell, Chris Sanchirico, Doug Bernheim, Dennis Carlton, Glenn Ellison, ...

We consider an in¯nitely repeated Bertrand game, in which prices are publicly observed and each ¯rm receives a privately observed, i.i.d. cost shock in each period. We focus on symmetric perfect...

Collusion and price rigidity (2004)

Abstract. We consider an infinitely-repeated Bertrand game, in which prices are perfectly observed and each firm receives a privately-observed, i.i.d. cost shock in each period. We focus on symmetric...

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...

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...

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...

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...

GATT-think (2002)

Collusion and price rigidity (2002)

In this paper, we present research that speaks to the purpose and design of GATT. The paper proceeds in three basic steps. We first discuss the major theoretical approaches to the study of trade...

Athey, Susan, Bagwell, Kyle, Sanchirico, Chris

We consider an infinitely repeated Bertrand game, in which prices are publicly observed and each firm receives a privately observed, i.i.d. cost shock in each period. We focus on symmetric perfect...

Multilateral trade negotiations, bilateral opportunism and the rules of GATT/WTO (2002)

Game theory and industrial organization (2002)

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...

Bagwell, Kyle, Wolinsky, Asher

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;...

GATT-think (2002)

Multilateral trade negotiations, bilateral opportunism and the rules of GATT/WTO (2002)

In this paper, we present research that speaks to the purpose and design of GATT. The paper proceeds in three basic steps. We first discuss the major theoretical approaches to the study of trade...

Game theory and industrial organization (2002)

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...

Bagwell, Kyle, Wolinsky, Asher

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;...

Collusion and price rigidity (2002)

Athey, Susan, Bagwell, Kyle, Sanchirico, Chris

We consider an infinitely repeated Bertrand game, in which prices are publicly observed and each firm receives a privately observed, i.i.d. cost shock in each period. We focus on symmetric perfect...

Game Theory and Industrial Organization (2002)

Kyle Bagwell, Asher Wolinsky

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;...

Collusion and Price Rigidity (2002)

Susan Athey, Kyle Bagwell, Chris Sanchirico, Michael Riordan, Jesse Schwartz, Scott Stern, ...

We consider an infinitely repeated Bertrand game, in which prices are publicly observed and each rm receives a privately observed, i.i.d. cost shock in each period. We focus on symmetric perfect...

Optimal Collusion with Private Information (2001)

Game Theory and Industrial Organization (2000)

pp. 428–465 We analyze collusion in an infinitely repeated Bertrand game, where prices are publicly observed and each firm receives a privately observed, i.i.d. cost shock in each period....

Bagwell, Kyle, Wolinsky, Asher

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;...

An Economic Theory of GATT (1998)

The Simple Economics of Labor Standards and the GATT (1998)

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...

Kyle Bagwell, Robert W. Staiger, Jel Nos F

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...

Collusion and Price Rigidity (1998)

Domestic Policies, National Sovereignty and International Economic Institutions (1998)

. We consider an infinitely-repeated Bertrand game, in which prices are perfectly observed and each firm receives a privately-observed, i.i.d. cost shock in each period. We focus on symmetric perfect...

Kyle Bagwell And, Kyle Bagwell, Robert W. Staiger

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...

An Economic Theory of GATT (1997)

Reciprocity, Non-Discrimination, and Preferential Agreements in the Multilateral Trading System (1997)

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...

Regionalism and Multilateral Tariff Cooperation (1996)

We present a framework for understanding and interpreting reciprocity and nondiscrimination, the two principles that are the pillars of the multilateral trading system as embodied in GATT and its...

Signalling, entry, and repeat business /--by Kyle Bagwell. (1986)

We consider a three country world in which each country's import market is served by competing exporters from it's two trading partners. We assume that weak multilateral enforcement mechanisms...

Bagwell, Kyle.

Thesis (Ph. D.)--Stanford University, 1986.

National Sovereignty in an Interdependent World

High and Declining Prices Signal Product Quality.

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...

Bagwell, Kyle, Riordan, Michael H

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...

Collusion and Price Rigidity

Erratum to "Multilateral trade negotiations, bilateral opportunism and the rules of GATT/WTO" [J. Int. Econ. 63 (1) (2004) 1-29]

Erratum to Multilateral trade negotiations, bilateral opportunism and the rules of GATT/WTO

Enforcement, Private Political Pressure and the GATT/WTO Escape Clause

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;...

Subsidy Agreements

Multilateral Tariff Cooperation during the Formation of Customs Unions

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...

Multilateral Tarriff Cooperation During the Formation of Regional Free Trade Areas

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...

The role of export subsidies when product quality is unknown

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...

B. Douglas Bernheim, Kyle Bagwell

Is Everything Neutral?

In his well-known analysis of the national debt, Robert Barro introduced the notion of a "dynastic family." This notion has since become a standard research tool, particularly in the areas of public...

Collusion with Persistent Cost Shocks

Will International Rules on Subsidies Disrupt the World Trading System?

Game Theory and Industrial Organization

We provide a first formal analysis of the international rules that govern the use of subsidies to domestic production. Our analysis highlights the impact of the new subsidy disciplines that were...

Kyle Bagwell, Asher Wolinsky

The Role Of Export Subsisies When Product Quality Is Unknown

Competitive Limit Pricing Under Imperfect Information

We explore in this paper the role of export subsidies when goods arriving from foreign countries are initially of unknown quality to domestic consumers, who learn about their quality only through...

Pricing to Signal Product Line Quality

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...

Advertising and Coordination

Optimal Export Policy for a New-Product Monopoly

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...

Capacity, Entry and Forward Induction

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...

The Sensitivity of Strategic and Corrective R&D Policy in Battles for Monopoly

We introduce avoidable fixed costs into the capacity and entry model of Dixit (1980) to produce a coordination problem among multiple postentry equilibria. Elimination of weakly dominated strategies...

The Sensitivity of Strategic and Corrective R&D Policy in Oligopolistic Industries

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....

Robert W. Staiger, Kyle Bagwell

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...

Risky R&D in Oligopolistic Product Markets

The Sensitivity of Strategic and Corrective R&D Policy in Oligopolistic Industries

The Sensitivity of Strategic and Corrective R&D Policy in Battles for Monopoly

Oligopoly Limit Pricing

High and Declining Prices Signal Product Quality

Kyle Bagwell, Michael Riordan

Advertising, Coordination, and Signaling

Dynamic Monopoly Power When Search is Costly

Kyle Bagwell, Michael Peters

Advertising and Limit Pricing

Introductory Price as a Signal of Cost in a Model of Repeat Business

Informational Product Differentiation as a Barrier to Entry

Equilibrium Price Dynamics for an Experience Good

Kyle Bagwell, Michael Riordan

A Theory of Managed Trade

Collusion and price rigidity

We consider an infinitely repeated Bertrand game, in which prices are publicly observed and each firm receives a privately observed, i.i.d. cost shock in each period. We focus on symmetric perfect...

GATT-think

Multilateral trade negotiations, bilateral opportunism and the rules of GATT/WTO

In this paper, we present research that speaks to the purpose and design of GATT. The paper proceeds in three basic steps. We first discuss the major theoretical approaches to the study of trade...

Game theory and industrial organization

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...

Kyle Bagwell, Asher Wolinsky

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;...

Pricing to Signal Product Line Quality.

Countercyclical Pricing in Customer Markets

This paper offers a general characterization of the optimal product line prices for a monopolist whose quality of products is initially unknown to consumers. In the focal equilibrium, a monopolist...

Look How Little I’m Advertising!

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...

Kyle Bagwell, Per Baltzer Overgaard

This paper studies the role of advertising and prices as signals of quality in a purely static setting, where repeat purchases are suppressed altogether, but where advertising affects demand...

An Economic Theory of GATT

Optimal Export Policy for a New-Product Monopoly.

The authors propose a unified theoretical framework within which to interpret and evaluate the foundational principles of GATT. Working within a general equilibrium trade model, they represent...

A Theory of Managed Trade.

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...

The WTO as a Mechanism for Securing Market Access Property Rights: Implications for Global Labor and Environmental Issues

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...

The Sensitivity of Strategic and Corrective R&D Policy in Battles for Monopoly.

Can the World Trade Organization (WTO) contribute to the attainment of sound labor and environmental policies? An answer requires an understanding of WTO rules. We argue that the purpose of WTO rules...

The case for tradable remedies in WTO dispute settlement

The authors characterize the role for R&D subsidies in export markets where R&D is an uncertain process and the winner of the R&D competition monopolizes the market. Investments are assumed to induce...

Bagwell, Kyle, Mavroidis, Petros C., Staiger, Robert W.

In response to concerns over the efficacy of the WTO dispute settlement system, especially in regard to its use by developing countries, Mexico has tabled a proposal to introduce tradable remedies...

Will Preferential Agreements Undermine the Multilateral Trading System?

Chile price band system and safeguard measures relating to certain agricultural products

BAGWELL, KYLE, SYKES, ALAN O.

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...

Reciprocity, non-discrimination and preferential agreements in the multilateral trading system

A Model of Competitive Limit Pricing.

Advertising as Information: Matching Products to Buyers.

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...

Informational aspects of foreign direct investment and the multinational firm

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...

Collusion With Persistent Cost Shocks

Collusion with persistent cost shocks

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,...

The case for auctioning countermeasures in the WTO

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,...

Petros C. Mavroidis, Kyle Bagwell, Robert W. Staiger

A major accomplishment of the Uruguay Round of GATT negotiations in creating the World Trade Organization (WTO) was the introduction of new dispute settlement procedures. These procedures were...

Backward stealing and forward manipulation in the WTO

Signaling and entry deterrence: A multi-dimensional analysis

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...

What do trade negotiators negotiate about? Empirical evidence from the World Trade Organization

This paper considers a long-standing question in the field of Industrial Organization: Can an incumbent firm price and advertise so as to deter entry that otherwise would be profitable? For the most...

Trust, reciprocity and favors in cooperative relationships

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...

Atila Abdulkadiroglu, Kyle Bagwell

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...

The Economic Analysis of Advertising

Enforcement, Private Political Pressure and the Gatt/Wto Escape Clause

By its very nature, advertising is a prominent feature of economic life. Advertising reaches consumers through their TV sets, radios, newspapers, magazines, mailboxes, computers and more. Not...

Will international rules on subsidies disrupt the world trading system?

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;...

The Role of Export Subsidies When Product Quality is Unknown

We provide a first formal analysis of the international rules that govern the use of subsidies to domestic production. Our analysis highlights the impact of the new disciplines on subsidies that were...

Kyle Bagwell, R. Staiger

Remedies in the WTO: An economic perspective

Auctioning countermeasures in the WTO

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)...

Bagwell, Kyle, Mavroidis, Petros C., Staiger, Robert W.

Strategic Export Subsidies and Reciprocal Trade Agreements: The Natural Monopoly Case

Reciprocal Trade Liberalization

Why do governments seek restrictions on the use of export subsidies through reciprocal trade agreements such as GATT? With existing arguments, it is possible to understand GATT's restrictions on...

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...

Coordination Economies

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...

Capacity

We show that when avoidable fixed costs are introduced into the capacity-and-entry model of Dixit(1980) and Ware(1984), there arises a coordination problem in selecting among postentry Nash...

Collusion Over the Business Cycle

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...

Dynamic Retail Price and Investment Competition

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...

Miltilateral Tariff Cooperation During the Formation of Customs Unions

We develop a simple model of retail competition in which retailers select prices and investments in cost reduction. Unable to observe firms' current prices prior to costly search, consumers monitor...

Multilateral Tariff Cooperation During the Formation of Free Trade Areas

We study the implications of customs union formation for multilperation. We model copperation in multilateral trade policy as self-enforcing, in that it involves balancing the current gains from...

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...

Coordination Economies

The Economic Analysis of Advertising

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...

Bagwell, Kyle, Mark Armstrong, Robert Porter

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...

The case for tradable remedies in WTO dispute settlement

Petros C. Mavroidis, Kyle Bagwell, Robert W. Staiger

It has been almost two 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...

Strategic export subsidies and reciprocal trade agreements: The natural monopoly case

Collusion and Price Rigidity

Advertising and Coordination.

We consider an infinitely repeated Bertrand game, in which prices are publicly observed and each firm receives a privately observed, i.i.d. cost shock in each period. We focus on symmetric perfect...

Introductory Price as a Signal of Cost in a Model of Repeat Business.

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....

Strategic Trade, Competitive Industries and Agricultural Trade Disputes

This paper analyzes a bargaining model with incomplete information in which the time between offers is an endogenous stra tegic variable. It finds equilibria involving a delay to agreement th at is...

Game theory and industrial organization

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...

Bagwell, Kyle, Wolinsky, Asher, R.J. Aumann, S. Hart

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;...

Coordination Economies, Advertising, and Search Behavior in Retail Markets.

Commitment and Observability in Games

The authors 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, the authors show that ostensibly...

The Diamond Paradox: A Dynamic Resolution

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...

Advertising as Information: Matching Products to Buyers

We consider the role of repeat business in resolving the paradox of Diamond (1971). In each period, consumers engage in sequential price search at a positive search cost. Consumers enforce pricing...

Informational product differentiation as a barrier to entry

We consider communication of quality via cheap talk and dissipative advertising, when consumers have heterogeneous tastes for quality. For search goods, cheap talk communicates quality when fixed...

Advertising and pricing to deter or accommodate entry when demand is unknown

Multilateral trade negotiations, bilateral opportunism and the rules of GATT/WTO

Multilateral tariff cooperation during the formation of customs unions

The sensitivity of strategic and corrective R&D policy in oligopolistic industries

The Diamond Paradox: A Dynamic Resolution

Multilateral Tariff Cooperation during the Formation of Free Trade Areas.

Multilateral Tariff Cooperation During the Formation of Regional Free Trade Areas

The authors consider the impact of the formation of free-trade agreements on multilateral tariff cooperation. They assume that countries are limited to self-enforcing multilateral arrangements that...

Multilateral Tariff Cooperation During the Formation of Customs Unions

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...

Optimal Collusion with Private Information.

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...

Athey, Susan, Bagwell, Kyle

We analyze collusion in an infinitely repeated Bertrand game, where prices are publicly observed and each firm receives a privately observed, i.i.d. cost shock in each period. Productive efficiency...

Collusion Over the Business Cycle

Dynamic Retail Price and Investment Competition

We present a theory of collusive pricing for markets in which demand alternates stochastically between fast-growth (boom) and slow-growth (recession) phases. We show that (1) the most-collusive...

Kyle Bagwell, Garey Ramey, Daniel F. Spulber

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...

Capacity, Entry, and Forward Induction

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...

Oligopoly Limit Pricing

Advertising and Limit Pricing

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...

Atila Abdulkadiroglu, Kyle Bagwell

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...

Trust Relations

We study trust relations in infinitely repeated interactions. In particular, we study the role different types of reciprocity play in overcoming information asymmetry in trust games

Coordination Economies, Sequential Search and Advertising

Dynamic Retail Price and Investment Competition

Kyle Bagwell, Garey Ramey, Daniel F. Spulber

Advertising as Information: Matching Products to Buyers

Advertising and Coordination

Coordination Economies, Advertising and Search Behavior in Retail Markets

Capacity, Entry and Forward Induction

Capacity, Entry and Forward Induction

Multilateral Tariff Cooperation During the Formation of Customs Unions

Bagwell, Kyle, Staiger, Robert

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...

Domestic Policies, National Sovereignty, And International Economic Institutions

Collusion and Price Rigidity

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...

Optimal Collusion with Private Information

Collusion with Persistent Cost Shocks

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...

Private Cost Information and the Multinational Enterprise

A Theory of Managed Trade

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...

Collusion over the Business Cycle

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...

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...

Reciprocal Trade Liberalization

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...

Strategic Export Subsidies and Reciprocal Trade Agreements: The Natural Monopoly Case

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...

Regionalism and Multilateral Tariff Cooperation

Why do governments seek restrictions on the use of export subsidies through reciprocal trade agreements such as GATT? With existing arguments, it is possible to understand GATT's restrictions on...

Reciprocity, Non-discrimination and Preferential Agreements in the Multilateral Trading System

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...

An Economic Theory of GATT

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...

The Simple Economics of Labor Standards and the GATT

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...

Kyle Bagwell, Richard W. Staiger

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...

Multilateral Trade Negotiations, Bilateral Opportunism and the Rules of GATT

Domestic Policies, National Sovereignty and International Economic Institutions

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...

Strategic Trade, Competitive Industries and Agricultural Trade Disputes

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 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...

GATT-Think

The Case for Auctioning Countermeasures in the WTO

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...

Kyle Bagwell, Petros C. Mavroidis, Robert W. Staiger

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...

Backward Stealing and Forward Manipulation in the WTO

What Do Trade Negotiators Negotiate About? Empirical Evidence from the World Trade Organization

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...

Enforcement, Private Political Pressure, and the General Agreement on Tariffs and Trade/World Trade Organization Escape Clause

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...

Bernheim, B Douglas, Bagwell, Kyle

c) negotiated commitments can be implemented only if they are self-enforcing. We thus consider the design of self-enforcing trade agreements among governments that acquire private information over...

Is Everything Neutral?

In this paper, the authors critique the assumption on which Robert J. Barro's dynastic model is predicated and a rgue that this framework is not a suitable abstraction in contexts in which the...

Self-Enforcing Trade Agreements and Private Information

Profit Shifting and Trade Agreements in Imperfectly Competitive Markets

This paper considers self-enforcing trade agreements among privately informed governments. A trade agreement that uses weak bindings (i.e., maximal tariff levels) is shown to offer advantages...

The Economics of the World Trading System

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...

Advertising and Collusion in Retail Markets

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...

Gea Myoung Lee, Kyle Bagwell

We consider non-price advertising by retail firms that are privately informed as to their respective production costs. We first analyze a static model. We construct an advertising equilibrium, in...

The WTO: Theory and Practice

Delocation and Trade Agreements in Imperfectly Competitive Markets

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...

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...

The Economics of Trade Agreements in the Linear Cournot Delocation Model

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...