Trade compromises between the European community and the United States: An interest group-game theory

Martin Johnson, Louis Mahe, Terry Roe

Research output: Contribution to journalArticlepeer-review

16 Scopus citations

Abstract

The role of special interests in the prolonged U.S. and European Community negotiations of agricultural policies under GATT are measured by an estimated political payoff function (PPF). The analysis searches for mutually acceptable agreements between the United States and the European Community using a world trade model coupled with game theory. Results suggest that it is in the best interest of the United States (resp. EC) for the EC (resp. US) to liberalize while the other follows the status quo. Mutual gains in PPF values to both countries are unlikely to exist without altering each country's action space. Permitting compensatory payments to the most influential groups yields liberalization, but free trade does not result.

Original languageEnglish (US)
Pages (from-to)199-222
Number of pages24
JournalJournal of Policy Modeling
Volume15
Issue number2
DOIs
StatePublished - Apr 1993

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