Welfare Implications of Leadership in a Resource Market under Bilateral Monopoly
AbstractDoes 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 marchÃ© dâune ressource non-renouvelable, est-ce que son niveau de bien-Ãªtre devient plus Ã©levÃ©? On montre que la rÃ©ponse est affirmative quand il sâagit dâun leadership global, mais elle peut Ãªtre nÃ©gative dans le cas dâun leadership par Ã©tapes. Par contre, le niveau de bien-Ãªtre mondial sous lâÃ©quilibre de Nash est supÃ©rieur Ã celui qui est le rÃ©sultat de lâÃ©quilibre global de Stackelberg. Du point de vue du bien-Ãªtre mondial, lâÃ©quilibre de Stackelberg par Ã©tapes est meilleur que lâÃ©quilibre global de Stackelberg.
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Bibliographic InfoArticle provided by Springer in its journal Dynamic Games and Applications.
Volume (Year): 1 (2011)
Issue (Month): 4 (December)
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Web page: http://www.springer.com/economics/journal/13235
Other versions of this item:
- Kenji Fujiwara & Ngo Van Long, 2010. "Welfare Implications of Leadership in a Resource Market Under Bilateral Monopoly," CIRANO Working Papers 2010s-16, CIRANO.
- Kenji Fujiwara & Ngo Van Long, 2011. "Welfare Implications of Leadership in a Resource Market under Bilateral Monopoly," Discussion Paper Series 76, School of Economics, Kwansei Gakuin University, revised Sep 2011.
- C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
- Q34 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Natural Resources and Domestic and International Conflicts
- F18 - International Economics - - Trade - - - Trade and Environment
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