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A Political Economic Analysis of U.S. Rice Export Programs to Japan and South Korea: A Game Theoretic Approach
Author(s) -
Lee Dae-Seob,
Kennedy P. Lynn
Publication year - 2007
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1111/j.1467-8276.2007.00966.x
Subject(s) - tariff , economics , econometric analysis , international trade , game theory , market access , nash equilibrium , agriculture , intervention (counseling) , economic interventionism , international economics , politics , microeconomics , macroeconomics , political science , psychology , psychiatry , law , ecology , biology
The Uruguay Round Agreement on agriculture (UR) has contributed to the increase in U.S. and world rice trade since 1994. Despite this, the Japanese and Korean rice markets continue to be characterized by high levels of trade intervention. This paper attempts to analyze both import markets incorporating econometric estimates and public choice theory in a game theoretic framework. Various scenarios are analyzed. The results show that the overall Nash equilibrium occurs with a 4% tariff reduction for Japan and Korea under the U.S. Market Development Program, which includes the Market Access Program and Foreign Market Development Program.