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- W51276265 abstract "Dixit (1989), Eichengreen & Irwin (1996), Anderson & Marcouiller (1999) and Das et. al. (2001) showed the determining presence of Sunk Costs in the model of bilateral trade. Using this literature, some economists have introduced the trade lagged variable in the model. Nevertheless, in determination of the trade model, it is expected that the economic agent’s expectations are more important than the trade lagged variable. In addition, these expectations are possible to be included in the bilateral trade model by considering the presence of sunk costs. In this paper, we develop the model of Anderson and Wincoop (2003) to a theoretical gravity model which takes into account the expected trade costs to determine the volume of bilateral trade. This new theoretical development allows the participation of the � � � �" @default.
- W51276265 created "2016-06-24" @default.
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- W51276265 date "2005-01-01" @default.
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- W51276265 title "The Gravity Model and Sunk Costs: A Theoretical Analysis" @default.
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