Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/18881
Authors: 
Bala, Vankatesh
Long, Ngo Van
Year of Publication: 
2004
Series/Report no.: 
CESifo Working Paper 1242
Abstract: 
We consider the evolution of preferences when trade occurs between two countries. We show that if one country is much larger than the other, its preferences can eventually take over the preferences of the second country. This result may provide an explanation of why small countries sometimes exclude certain goods (especially those related to culture) from trade agreements. We also show that when the sensitivity of preferences to the relative price is high, the distribution of preferences can fluctuate cyclically over time.
Subjects: 
preferences
evolution
culture
replicator dynamics
international trade
JEL: 
D80
Document Type: 
Working Paper

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