The Gravity of Preferences: Integrating Cultural Reciprocity into Trade Flow Models

Korff & Steffen reveal that countries with punitive tendencies trade less—a behavioral insight absent from gravity models (Capoani, 2024). This research embeds preference data into gravity equations to isolate "reciprocity friction" effects. For example, we could test whether US-China trade declines stem more from reciprocal hostility than tariffs (Altemöller, 2024). By treating preferences as a "distance" metric (akin to geographic or cultural distance), this challenges the neoclassical assumption of rational actors. It extends Bharat et al.’s (2023) call for "21st-century trade theories" by operationalizing psychology as a structural force, potentially explaining anomalies like the CEMAC cycle desynchronization (Remy, 2025).

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