Information and Disclosure in Strategic Trade Policy

36 Pages Posted: 18 May 2006

See all articles by Anthony Creane

Anthony Creane

University of Kentucky

Kaz Miyagiwa

Emory University - Department of Economics; Osaka University - Institute of Social and Economic Research (ISER); Florida International University (FIU) - Department of Economics

Abstract

We examine the standard assumption in the strategic trade policy literature that governments possess complete information. Assuming instead that firms have better information, we explore the long-term incentives for firms to consistently disclose information to their governments in the standard setting. We find that with quantity competition firms disclose both demand and cost information to the governments, thereby giving some justification to the literature's omniscient-government assumption. Further, the equilibrium exhibits an informational prisoner's dilemma with demand uncertainty, but not with cost uncertainty. With price competition, however, firms have no incentives to disclose information.

Keywords: information, trade policy

JEL Classification: D8, F12

Suggested Citation

Creane, Anthony and Miyagiwa, Kaz, Information and Disclosure in Strategic Trade Policy. Available at SSRN: https://ssrn.com/abstract=902781 or http://dx.doi.org/10.2139/ssrn.902781

Anthony Creane (Contact Author)

University of Kentucky ( email )

Lexington, KY 40506
United States

Kaz Miyagiwa

Emory University - Department of Economics ( email )

1602 Fishburne Drive
Atlanta, GA 30322
United States

Osaka University - Institute of Social and Economic Research (ISER) ( email )

6-1 Mihogaoka
Ibaraki Osaka 567-0047
Japan

Florida International University (FIU) - Department of Economics ( email )

Miami, FL 33199
United States

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