Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/240407 
Year of Publication: 
2019
Series/Report no.: 
WWZ Working Paper No. 2019/21
Publisher: 
University of Basel, Center of Business and Economics (WWZ), Basel
Abstract: 
Standard international economic theory suggests that people should embrace economic integration because it promises large gains. But recent events such as Brexit indicate a desire for economic disintegration. Here we report results of an experiment, based on a strategic analytical framework, of how size and distribution of potential gains from integration influence outcomes and individuals' inclination to embrace integration. We find that cross-country inequality in potential gains acts as a friction to realize those gains. This suggests that to better understand recent phenomena, international economic theory should account for distributional considerations and behavioral aspects it currently ignores.
Subjects: 
endogenous institutions
globalization
indefinitely repeated games
social dilemmas
JEL: 
C70
C90
F02
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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