Abstract
Several tariff games are examined in which the home country has private information about whether its government is a low or high tariff type. If the foreign government is uncertain about this type in a one-shot game, its Nash equilibrium tariff will be lower (higher) than if it knew the home government were a low (high) tariff type. In two multistage games misleading behavior by the home government is an equilibrium strategy for sufficiently high discount factors. Whether or not uncertainty is persistent is important for welfare results. Tariff rules do not necessarily dominate discretionary policy in these models.
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