Abstract

This paper analyzes GATI' and its dispute settlement procedure (DSP) in the context of a supergame model of international trade featuring both explicit and implicit agreements. An explicit agreement, such as OAT!', may be violated at some positive cost in addition to retaliatory actions that might be induced by the violation. We interpret this cost as arising from 'international obligation, a phenomenon frequently mentioned in the legal literature on GAY!'. We focus on how international obligation affects two aspects of GAIT-DSP: unilateral retaliation and the effect of inordinate delays in the operation of DSP. Marie Thursby Dan Kovenock Department of Economics Department of Economics Krannert Graduate School of Management Krannert Graduate School Purdue University of Management West Lafayette, IN 47907 Purdue University and NBER West Lafayette, IN 47907

Talk to us

Join us for a 30 min session where you can share your feedback and ask us any queries you have

Schedule a call

Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.