Optimal domestic regulation under asymmetric information and international trade: a simple general equilibrium approach
研究小型开放经济中如何设计国内激励规制，发现信息不对称会扭曲贸易模式，且当自由贸易加剧代理问题时，自给自足可能优于自由贸易。
We investigate the design of domestic incentive regulations in a small economy opened to trade and its implications for international specialization and for trade openness to remain welfare‐improving. More specifically, we append to an otherwise standard 2 × 2 Heckscher‐Ohlin model of a small open economy a continuum of intermediate sectors producing nontradable goods used in tradable sectors. Those goods are produced by privately informed regulated firms. Asymmetric information induces distortions with general equilibrium impacts. The small economy becomes relatively richer in the informationally sensitive factor so that asymmetric information might reverse trade patterns. Free trade is Pareto‐dominated by autarky when it exacerbates agency distortions.