To facilitate comparisons, proportional differences were used to compare the autarky case and the best response case.
Figure 1 shows the increase in profit over autarky for four parameter changes.
Because autarky generally lies above the minimum promised utility in these regimes, it is not an absorbing state.
There is a small amount of mass at the autarky promised utility.
In this world, the move from autarky to openness involves the removal of a final distortion.
In particular, defection by a merchant is punished by having the defecting merchant get the payoff from autarky, which is zero.
However, they are better off relative to autarky. 23.
Most results are displayed with the utility range truncated at autarky (the minimum promised utility in the pure-debt regime).
