@techreport{NBERw2756,
 title = "A Theory of Managed Trade",
 author = "Kyle Bagwell and Robert W. Staiger",
 institution = "National Bureau of Economic Research",
 type = "Working Paper",
 series = "Working Paper Series",
 number = "2756",
 year = "1988",
 month = "November",
 URL = "http://www.nber.org/papers/w2756",
 abstract = {This paper proposes a theory that predicts low levels of protection during periods of "normal" trade volume coupled with episodes of "special" protection when trade volumes surge. This dynamic pattern of protection emerges from a model in which countries choose levels of protection in a repeated game setting facing volatile trade swings. High trade volume leads to a greater incentive to unilaterally defect from cooperative tariff levels. Therefore as the volume of trade expands, the level of protection must rise in a cooperative equilibrium to mitigate the rising trade volume and hold the incentive to defect in check.},
}