Learning by ruling and trade disputes

Abstract

At least one co-author has disclosed a financial relationship of potential relevance for this research. Further information is available online at http://www.nber.org/papers/w23774.ack NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

Trade Disputes and Settlement

“…If the policy were truly continuous, on the other hand, in the static model presented here, there would typically be no rulings, since the bargaining set would typically be convex. But it is important to note that this may no longer hold in a dynamic setting; for example, in a recent working paper (Maggi and Staiger, ) that focuses on the implications of judicial learning, we show that even if policies are truly continuous, there can be DSB rulings in equilibrium. Interestingly, Guzman and Simmons () draw a distinction between policies that have an “all or nothing” character, such as health and safety standards, and policies that are continuous and more “flexible” in nature such as tariffs, and in their empirical study of WTO disputes find that settlement rates are higher for disputes over more continuous policies.…”

“…In a recent working paper (Maggi and Staiger, ), we examine the implications of judicial learning for the dynamics of trade disputes. We discuss this paper further in the last section.…”

Learning by litigating: An application to antitrust commitments

“…Polo and Rey (2016) assume a static, one-shot interaction between parties. 11 . We 10 Spier (1992) considers a …nite-horizon ultimatum game with uninformed party making the settlement o¤er, to show that there is a high likelihood of settlement in the last period.…”

How are the precedents of trade policy rules made under the World Trade Organization?

“…Pelc (2014) examines whether an economically small dispute is pursued to obtain a desirable legal decision to use in future cases and Nyarko and Hsiang (2019) analyze whether lawyer panelists follow precedent more than nonlawyer panelists. Maggi and Staiger (2011, 2020) consider under what conditions binding precedents are desirable at the WTO and whether the chronological pattern of the number of disputes is consistent with legal precedent. Kucik et al (2023) demonstrate that the cases where the Appellate Body extends precedent are unlikely to follow the due date of compliance by respondents.…”