| 英文摘要 |
This paper addresses the impact of home-biased attitude toward foreign goods on trade and sheds light on the recent contentious issue of fairness in trade. Focusing on the burgeoning intra-industry trade, which has become a hotbed for home biasedness and unfairness, this study adopts a monopolistic competition model that emphasizes the degree of economic scales and differential preferences for varieties of goods. A decrease in the preference for foreign goods, stemming from psychological home biasedness, leads to reduced consumption and production of these goods. This, in turn, provokes a decrease in demand elasticity, resulting in a greater increase in relative prices. Consequently, we observe an escalation in the total value of imports or trade rather than a decline, as evidenced by the recent bilateral trade between the US and China. The dynamics of home biasedness and trade are further explored and simulated using computational methods. |