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Relative Gains in the Shadow of a Trade War

Published online by Cambridge University Press:  04 March 2022

Abstract

When do people care about relative gains in trade? Much of the international relations scholarship—and much of the political rhetoric on trade—would lead us to expect support for a trade policy that benefits ourselves more than it benefits others. Yet, a large interdisciplinary literature also points to the prevalence and importance of other-regarding preferences, rendering the conventional wisdom contestable. We investigate whether and how relative gains influence trade preferences through an original survey experiment in the midst of the China–US trade war. We find that in a win-win scenario, relative gains shape trade opinion: if both sides are gaining, people want to gain more than their foreign trade partner. However, these considerations are offset in a win-lose scenario where the other side is losing out. Relative-gains considerations causally affect opinion on trade, but not in a “beggar-thy-neighbor” or even a “beggar-thy-rival” situation. These findings contribute to our understanding of the role of relative gains in international relations and provide the first experimental evidence that relative-gains considerations can be offset by other-regarding preferences in international trade.

Information

Type
Research Note
Creative Commons
Creative Common License - CCCreative Common License - BY
This is an Open Access article, distributed under the terms of the Creative Commons Attribution licence (https://creativecommons.org/licenses/by/4.0/), which permits unrestricted re-use, distribution, and reproduction in any medium, provided the original work is properly cited.
Copyright
Copyright © The Author(s), 2022. Published by Cambridge University Press on behalf of The IO Foundation
Figure 0

Figure 1. Design of study

Figure 1

Table 1. Average treatment effect among groups presented with the removal of import limits

Figure 2

Table 2. Average treatment effect among groups presented with the imposition of import limits

Figure 3

Figure 2. Approval rate for removal of import limits by nationalism

Figure 4

Figure 3. Approval rate for imposition of import limits by nationalism

Figure 5

Figure 4. Coding of open-ended responses by treatment condition in the win-lose scenario

Figure 6

Figure 5. Disaggregation of other-regarding responses by treatment condition in the win-lose scenario

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