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Psychology and opposition to free trade

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  • KEMP, SIMON

Abstract

This paper reviews psychological reasons why the enthusiasm of the general public for free international trade might be less than that of the economist. Six specific reasons are advanced: (1) lay views of utility emphasize employment over consumption; (2) status quo bias results from loss aversion; (3) people think altruistically but parochially; (4) people often consider fairness in bargaining situations; (5) people may hold inappropriate fixed pie beliefs; and (6) people may misunderstand Ricardo's principle of comparative advantage. The reasons vary in their apparent rationality and appear to operate in concert rather than independently.

Suggested Citation

  • Kemp, Simon, 2007. "Psychology and opposition to free trade," World Trade Review, Cambridge University Press, vol. 6(1), pages 25-44, March.
    • Handle: RePEc:cup:wotrrv:v:6:y:2007:i:01:p:25-44_00
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    Cited by:

    1. Christopher Hartwell, 2022. "Institutions and trade‐related inequality," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(3), pages 3246-3264, July.
    2. Dominik H. Enste & Alexandra Haferkamp & Detlef Fetchenhauer, 2009. "Unterschiede im Denken zwischen Ökonomen und Laien – Erklärungsansätze zur Verbesserung der wirtschaftspolitischen Beratung," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 10(1), pages 60-78, February.
    3. Barbara Dluhosch & Daniel Horgos, 2013. "Trading Up the Happiness Ladder," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 113(3), pages 973-990, September.
    4. Zahrnt, Valentin, 2008. "Domestic constituents and the formulation of WTO negotiating positions: what the delegates say," World Trade Review, Cambridge University Press, vol. 7(2), pages 393-421, April.
    5. Johnson, Samuel G. B., 2019. "Toward a cognitive science of markets: Economic agents as sense-makers," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 13, pages 1-29.
    6. Haferkamp, Alexandra & Fetchenhauer, Detlef & Belschak, Frank & Enste, Dominik, 2009. "Efficiency versus fairness: The evaluation of labor market policies by economists and laypeople," Journal of Economic Psychology, Elsevier, vol. 30(4), pages 527-539, August.
    7. Simon Kemp, 2008. "Lay attitudes to trade with low-wage countries," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 3, pages 335-343, April.
    8. Robert Lepenies, 2014. "Economists as political philosophers : a critique of normative trade theory," RSCAS Working Papers 2014/11, European University Institute.
    9. Johnson, Samuel G. B., 2019. "Toward a cognitive science of markets: Economic agents as sense-makers," Economics Discussion Papers 2019-10, Kiel Institute for the World Economy (IfW Kiel).
    10. Lotz, Sebastian & Fix, Andrea R., 2013. "Not all financial speculation is treated equally: Laypeople’s moral judgments about speculative short selling," Journal of Economic Psychology, Elsevier, vol. 37(C), pages 34-41.
    11. Godoy, Ricardo & Zeinalova, Elizabeth & Reyes-García, Victoria & Huanca, Tomás & Kosiewicz, Holly & Leonard, William R. & Tanner, Susan, 2010. "Does civilization cause discontentment among indigenous Amazonians? Test of empirical data from the Tsimane' of Bolivia," Journal of Economic Psychology, Elsevier, vol. 31(4), pages 587-598, August.
    12. Nguyen, Quynh, 2015. "“Mind the Gap”: Inequality Aversion and Mass Support for Protectionism," Papers 838, World Trade Institute.
    13. Jacob, Robert & Christandl, Fabian & Fetchenhauer, Detlef, 2011. "Economic experts or laypeople? How teachers and journalists judge trade and immigration policies," Journal of Economic Psychology, Elsevier, vol. 32(5), pages 662-671.
    14. repec:cup:judgdm:v:3:y:2008:i::p:335-343 is not listed on IDEAS
    15. Jäkel, Ina C. & Smolka, Marcel, 2017. "Trade policy preferences and factor abundance," Journal of International Economics, Elsevier, vol. 106(C), pages 1-19.

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