Trade Policy and Loss Aversion *

  title={Trade Policy and Loss Aversion *},
  author={Caroline Freund and Biron Ca and lar {\"O}zden},
We provide new survey evidence showing that loss aversion and reference dependence are important in shaping people’s preferences over trade policy. Under the assumption that agents’ welfare functions exhibit these behavioral elements, we analyze a model with a welfare-maximizing government and with the lobbying framework of Grossman and Helpman (1994). The policy implications of the augmented models differ in three important ways. One, there is a region of compensating protection, where a… CONTINUE READING
10 Citations
11 References
Similar Papers


Publications referenced by this paper.
Showing 1-10 of 11 references

The Political Economy of Declining Industries: Senescent Industry Collapse Revisited

  • S. L. Brainard, T. Verdier
  • Influence” Quarterly Journal of Economics
  • 1997
Highly Influential
4 Excerpts

Antidumping, Signaling and Cheap Talk

  • J. Cassing
  • University of Pittsburgh,
  • 2003

Is Protection for Sale? Evidence on the Grossman-Helpman Theory of Endogenous Protection,

  • K. Gawande, U. Bandyopadhyay
  • Review of Economics and Statistics,
  • 2000
1 Excerpt

Lobby Formation and Endogenous Protection: A Long-Run Model of Trade Policy Determination

  • D. Greenaway Ed
  • American Economic Review
  • 1999
1 Excerpt

Political Economy and Contingent Protection

  • P. Tharakan
  • The Economic Journal,
  • 1996
2 Excerpts

Protection for Sale

  • G. Grossman
  • American Economic Review,
  • 1994

Protectionist Responses and Declining Industries

  • V. N. Long, N. Vousden
  • Journal of International Economics
  • 1991
1 Excerpt

Rational Consumers and Irrational Voters,

  • Austen-Smith, David
  • Economics and Politics,
  • 1991

The Endowment Effect, Loss Aversion, and the Status Quo Bias

  • Publishers, D. Chur. Kahneman, J. Knetsch, R. Thaler
  • Journal of Economic Perspectives
  • 1991

Similar Papers

Loading similar papers…