| We study three topics in the field of international trade. First, in Chapter 2, we analyze R&D rivalry in the world economy within a patent race between two firms. We model R&D as a process of sequential engagement with different R&D projects, only one of which will be successful; the competing firms can only learn about the different projects' likelihood of success in the process of engaging them. Given this uncertainty, a firm may choose to follow the same R&D path as its rival, thus duplicating R&D efforts. We derive the conditions under which such socially wasteful duplication would arise and discuss policies that may achieve a socially optimal R&D.; Chapter 3, next, analyzes the effect of domestic antidumping laws on the economy in the context of an international duopoly. Because foreign dumping may result in this setting from two factors--asymmetry of taste between the two countries and the foreign country's unilateral tariff on imports of the domestic firm's products--the issue of antidumping enforcement arises. We show that the domestic firm's gain from antidumping enforcement remains ambiguous; thus, antidumping laws may not actually be invoked. We find that the laws are more likely to be invoked if the foreign tariff rate is high. Our analysis also includes some welfare implications of antidumping laws.; Finally, in Chapter 4, we analyze trade negotiations for further trade liberalization. The governments of two countries alternate in offering a pair of tariffs. A soon as they reach agreement, an implementation phase starts in which the countries put into effect the agreed-upon pair of tariffs. We investigate how the difference in the two governments' patience affects the negotiation result. We find that the country with the more patient government gains most from the negotiation if the time lag between a defection and punishment in the implementation phase is short. The opposite is true if the response lag in the implementation phase is long. |
