The Price Ceiling that Minimizes an Exporter’s Profits Without Raising the Buyers’ Price Excessively

Stephen W. Salant, Diego S. Cardoso and Julien Xavier Daubanes

No 12608, CESifo Working Paper Series from CESifo

Abstract: To reduce Russia's ability to fund its war in Ukraine, Western governments imposed a price ceiling on Russian seaborne oil exports. Policy-makers sought a ceiling level to lower Russia's oil profits without raising excessively the world price buyers pay for oil. Previous analyses have explored this problem using simulations and, with a single exception, have treated the non-Russian supply response as exogenous. We pose the problem theoretically as a constrained minimization problem of the policy maker and solve it, treating Russia as either a monopolist or an oligopolist facing heterogeneous rivals with endogenous supply.

Keywords: price cap; oil price; strategic supply (search for similar items in EconPapers)
JEL-codes: D78 L13 Q41 (search for similar items in EconPapers)
Date: 2026
New Economics Papers: this item is included in nep-bec, nep-cis, nep-com, nep-ene, nep-ind and nep-inv
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.ifo.de/DocDL/cesifo1_wp12608.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_12608

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().