Negotiated Trade Restrictions with Private Political Pressure
研究国内政府面临保护主义政治压力时，与外国协商贸易量和租金转移，设计激励相容的贸易政策，防止政府夸大或缩小保护压力。
We consider a home government with political pressure to restrict trade. The foreign country is compensated with a portion of the tariff revenues or quota rents, but cannot directly observe the political pressure abroad. In this setting, the two countries negotiate over the volume of trade and transfer of rents, depending on the level of political pressure. We determine globally optimal, incentive-compatible trade policies, in which the home government has no incentive to overstate (or understate) the pressure for protection.