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Information led trade: The role of non‐marketed complementaries in preferences

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  • Sattwik Santra

Abstract

Recent advances in the theoretical literature on international trade have shown considerable interest in the demand side of the general equilibrium. This paper supplements the literature by highlighting the role of non‐marketed complementaries. Individuals derive utility by consuming two marketed commodities and a non‐marketed commodity. The non‐marketed commodity affects the relative demands of the marketed commodities by acting as complement to one of the marketed commodities. Considering “information” as an exemplar of the non‐marketed commodity, this paper derives a number of insightful results that relate the volume and pattern of trade to the stock and flow of information.

Suggested Citation

  • Sattwik Santra, 2021. "Information led trade: The role of non‐marketed complementaries in preferences," International Journal of Economic Theory, The International Society for Economic Theory, vol. 17(1), pages 46-56, March.
    • Handle: RePEc:bla:ijethy:v:17:y:2021:i:1:p:46-56
    DOI: 10.1111/ijet.12266
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    References listed on IDEAS

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