Welfare Implications of Leadership in a Resource Market Under Bilateral Monopoly

Kenji Fujiwara () and Ngo Long

CIRANO Working Papers from CIRANO

Abstract: Does a country strictly gain if it acts as a leader in a resource market under bilateral monopoly? Using differential games, we show that the answer is "yes"" when leadership can be exercised globally (global Stackelberg leadership), but possibly ""no"" when it is exercised only at each stage (stagewise Stackelberg leadership). On the other hand, world welfare under Nash equilibrium is strictly higher than under global Stackelberg equilibrium. Regardless of which country is the leader, world welfare under stagewise Stackelberg leadership is higher than under global Stackelberg leadership." Quand un pays est un leader dans un marché d'une ressource non-renouvelable, est-ce que son niveau de bien-être devient plus élevé? On montre que la réponse est affirmative quand il s'agit d'un leadership global, mais elle peut être négative dans le cas d'un leadership par étapes. Par contre, le niveau de bien-être mondial sous l'équilibre de Nash est supérieur à celui qui est le résultat de l'équilibre global de Stackelberg. Du point de vue du bien-être mondial, l'équilibre de Stackelberg par étapes est meilleur que l'équilibre global de Stackelberg.

Keywords: dynamic game; exhaustible resource; Stackelberg leadership.; jeu dynamique; ressources non-renouvelables; leadership de Stackelberg. (search for similar items in EconPapers)
JEL-codes: C73 F18 Q34 (search for similar items in EconPapers)
Date: 2010-04-01
New Economics Papers: this item is included in nep-ene, nep-env, nep-gth and nep-ind
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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https://cirano.qc.ca/files/publications/2010s-16.pdf

Related works:
Journal Article: Welfare Implications of Leadership in a Resource Market under Bilateral Monopoly (2011)
Working Paper: Welfare Implications of Leadership in a Resource Market under Bilateral Monopoly (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:cir:cirwor:2010s-16

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