The institutional features of the WTO motivate the use of renegotiation proofness as an equilibrium concept in repeated tariff-setting games. We show existence of a renegotiation-proof equilibrium that reduces tariffs below the noncooperative level. We find that the one-shot Nash equilibrium...

This paper characterizes analytically the optimal tariff of a large one-sector economy with monopolistic competition and firm heterogeneity in general equilibrium, thereby extending the small-country results of Demidova and Rodriguez-Clare (JIE, 2009) and the homogeneous firms framework of Gros...

We explore how outcomes of trade policy retaliation (Nash tariff games) are affected when trade simultaneously takes places geographically across countries and through time via financial intermediation. In such models deficits and surpluses in goods trade are endogenously determined, and...