Dynamic bargaining model reveals key to achieving global free trade
The article explores how countries negotiate free trade agreements. It looks at whether countries should negotiate with smaller groups or all countries at once. The researchers found that the choice between these approaches depends on how trade agreements affect different countries. They show that global free trade can happen when all countries work together. However, if countries have strong reasons to protect their own industries, global free trade may not be achieved. The researchers also found that preferential trade agreements can either help or hinder global free trade, depending on the circumstances.