| This dissertation is composed of three essays on the international economics when there is informational asymmetry among economic agencies.; The opening essay analyzes the optimal choice of R&D subsidy by a government in the context of signaling and screening models. If the government knows the exact effect of domestic R&D activities and a foreign firm does not (a signaling model), then the government gives a higher subsidy to a domestic firm than under complete information. On the other hand, if the government is not well-informed on the effectiveness of domestic R&D activities (a screening model), then the government gives a lower subsidy to the domestic firm than under complete information. These directions in which the incomplete information distorts the policy in signaling and screening models do not change with the mode of competition in the product market.; In the second essay, a domestic government protects an import-competing industry in its jurisdiction through choice of tariff and/or subsidy. The government chooses its trade policy without precise knowledge of the cost structure of the foreign firm. Under this form of incomplete information, the availability of multiple policy choices does not necessarily improve domestic welfare in contrast with the complete-information case in which it always does.; In the third essay, evolutionary game theory is applied to a simple model of government tariff-setting in international trade. Under the assumption that governments have short time horizons, lack the ability to do complicated calculations, and make errors once in a while, they play a dynamic tariff-setting game. It is shown that when the government(s) places a large weight on the contribution given by an import-competing lobby, the protectionist regime is likely to emerge in the long run, though the results become more ambiguous if the governments make errors more frequently. The discussion is generalized to the case in which the number of available policy actions is more than two. In addition, the case in which the weight that the government places on contribution is determined endogenously by the history of past policies it has chosen itself is investigated. |
