OPTIMAL TARIFFS ON EXHAUSTIBLE RESOURCES: THE CASE OF QUANTITY-SETTING

Kenji Fujiwara () and Ngo Long

International Game Theory Review (IGTR), 2012, vol. 14, issue 04, 1-17

Abstract: Constructing a dynamic game model of trade of an exhaustible resource, this paper compares feedback Nash and Stackelberg equilibria. We consider two different leadership scenarios: leadership by the importing country, and leadership by the exporting country. We numerically show that as compared to the Nash equilibrium, both countries are better off if the importing country is a leader, but that the follower is worse off if the exporting country is a leader. Consequently, the world welfare is highest under the importing country's leadership and lowest under the exporting country's leadership.

Keywords: Dynamic game; feedback Nash equilibrium; feedback Stackelberg equilibrium; C73; L72 (search for similar items in EconPapers)
JEL-codes: B4 C0 C6 C7 D5 D7 M2 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (3)

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Related works:
Working Paper: Optimal Tariffs on Exhaustible Resources: The Case of Quantity Setting (2012)
Working Paper: Optimal Tariffs on Exhaustible Resources: The Case of Quantity Setting (2012)
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DOI: 10.1142/S021919891240004X

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