IDEAS home Printed from https://ideas.repec.org/p/syd/wpaper/2123-7530.html
   My bibliography  Save this paper

Incentives, Protection and Time Consistency

Author

Listed:
  • Wright, Donald J.

Abstract

Given symmetric information, it is assumed that the optimal policy for a policy maker is to commit to future removal of tariff protection as this provides the form with a greater incentive to undertake cost reducing effort than otherwise. This policy is shown to be time inconsistent and as a result less cost reducing effort is undertaken than in the credible commitment solution. The introduction of asymmetric information weakens this last result as it allows the policy maker to credibly commit to at least some removal of tariff protection. As a consequence, the expected value of the policy maker's objective function may be greater under asymmetric information than symmetric information.

Suggested Citation

  • Wright, Donald J., 1992. "Incentives, Protection and Time Consistency," Working Papers 174, University of Sydney, School of Economics.
    • Handle: RePEc:syd:wpaper:2123/7530
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/2123/7530
    Download Restriction: no
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Aditya Bhattacharjea, 2002. "Infant Industry Protection Revisited," International Economic Journal, Taylor & Francis Journals, vol. 16(3), pages 115-133.
    2. Gervais, Jean-Philippe & Lapan, Harvey E., 2002. "Time consistent export quotas in an oligopolistic world market," Journal of International Economics, Elsevier, vol. 56(2), pages 445-463, March.
    3. Aurora Gómez Galvarriato & César L. Guerrero-Luchtenberg, 2005. "Impatience, International Competitiveness, and Political," DEGIT Conference Papers c010_015, DEGIT, Dynamics, Economic Growth, and International Trade.
    4. Delia Baghdasaryan & Krešimir Žigić, 2010. "Tariffs, market conduct and government commitment," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 18(1), pages 91-122, January.
    5. Richard Damania, 2003. "Protectionist Lobbying and Strategic Investment," The Economic Record, The Economic Society of Australia, vol. 79(244), pages 57-69, March.
    6. Kresimir Zigic, 2011. "Strategic Interactions in Markets with Innovative Activity: The Cases of Strategic Trade Policy and Market Leadership," CERGE-EI Books, The Center for Economic Research and Graduate Education - Economics Institute, Prague, edition 1, number b06, May.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:syd:wpaper:2123/7530. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Vanessa Holcombe (email available below). General contact details of provider: https://edirc.repec.org/data/deusyau.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.