Machina (2007) formulates a number of experiments, and shows that they can be used to test the Choquet expected utility model. We show that one of them can also be used to test the class of maxmin expected utility preferences in Klibanoff (2001). Those preferences are not Choquet expected...

This paper analyzes how uncertainty and the timing of its resolution infuence the formation and design of regional trade agreements. Two sources of uncertainty — in demand and costs — are considered. We compare the case in which uncertainty is resolved “early” (before tariffs are...

This paper analyzes how uncertainty influences the formation and design of regional trade agreements (TAs). Two sources of uncertainty — in demand and costs — are considered. Using a multi-stage game we show that, as long as some decisions are made after uncertainty is resolved,...