Advanced Search
MyIDEAS: Login

Welfare Implications of Leadership in a Resource Market Under Bilateral Monopoly

Contents:

Author Info

  • Kenji Fujiwara
  • Ngo Van Long

    ()

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.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.cirano.qc.ca/pdf/publication/2010s-16.pdf
Download Restriction: no

Bibliographic Info

Paper provided by CIRANO in its series CIRANO Working Papers with number 2010s-16.

as in new window
Length:
Date of creation: 01 Apr 2010
Date of revision:
Handle: RePEc:cir:cirwor:2010s-16

Contact details of provider:
Postal: 2020 rue University, 25e étage, Montréal, Quéc, H3A 2A5
Phone: (514) 985-4000
Fax: (514) 985-4039
Email:
Web page: http://www.cirano.qc.ca/
More information through EDIRC

Related research

Keywords: dynamic game; exhaustible resource; Stackelberg leadership. ; jeu dynamique; ressources non-renouvelables; leadership de Stackelberg.;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Larry Karp & David M. Newbery, 1992. "Dynamically Consistent Oil Import Tariffs," Canadian Journal of Economics, Canadian Economics Association, vol. 25(1), pages 1-21, February.
  2. Tahvonen, Olli, 1996. "Trade with Polluting Nonrenewable Resources," Journal of Environmental Economics and Management, Elsevier, vol. 30(1), pages 1-17, January.
  3. Karp, Larry & Newbery, David M, 1991. "OPEC and the U.S. Oil Import Tariff," Economic Journal, Royal Economic Society, vol. 101(405), pages 303-13, March.
  4. Santiago J. Rubio & Luisa Escriche, 1998. "- Strategic Pigouvian Taxation, Stock Externalities And Polluting Non-Renewable Resources," Working Papers. Serie EC 1998-23, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  5. Dockner,Engelbert J. & Jorgensen,Steffen & Long,Ngo Van & Sorger,Gerhard, 2000. "Differential Games in Economics and Management Science," Cambridge Books, Cambridge University Press, number 9780521637329, November.
  6. Hassan Benchekroun & Ngo Van Long & Huilan Tian, 1998. "Learning By Doing And Strategic Trade Policy," Departmental Working Papers 1998-01, McGill University, Department of Economics.
  7. Hassan Benchekroun & Ngo Van Long, 1997. "Efficiency Inducing Taxation for Polluting Oligopolists," CIRANO Working Papers 97s-21, CIRANO.
  8. Wirl, Franz & Dockner, Engelbert, 1995. "Leviathan governments and carbon taxes: Costs and potential benefits," European Economic Review, Elsevier, vol. 39(6), pages 1215-1236, June.
  9. Maskin, Eric S & Newbery, David M, 1990. "Disadvantageous Oil Tariffs and Dynamic Consistency," American Economic Review, American Economic Association, vol. 80(1), pages 143-56, March.
  10. James L. Smith, 2009. "World Oil: Market or Mayhem?," Journal of Economic Perspectives, American Economic Association, vol. 23(3), pages 145-64, Summer.
  11. Bergstrom, Theodore C, 1982. "On Capturing Oil Rents with a National Excise Tax," American Economic Review, American Economic Association, vol. 72(1), pages 194-201, March.
  12. Karp, Larry, 1984. "Optimality and consistency in a differential game with non-renewable resources," Journal of Economic Dynamics and Control, Elsevier, vol. 8(1), pages 73-97, October.
  13. Santiago J. Rubio, 2005. "Tariff Agreements And Non-Renewable Resource International Monopolies: Prices Versus Quantitites," Working Papers. Serie AD 2005-10, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  14. James Brander & Slobodan Djajic, 1982. "Rent-Extracting Tariffs and the Management of Exhaustible Resources," Working Papers 468, Queen's University, Department of Economics.
  15. Liski, Matti & Tahvonen, Olli, 2004. "Can carbon tax eat OPEC's rents?," Journal of Environmental Economics and Management, Elsevier, vol. 47(1), pages 1-12, January.
  16. Karp, Larry & Newbery, David M., 1991. "Optimal tariffs on exhaustible resources," Journal of International Economics, Elsevier, vol. 30(3-4), pages 285-299, May.
  17. Reinganum, Jennifer F & Stokey, Nancy L, 1985. "Oligopoly Extraction of a Common Property Natural Resource: The Importance of the Period of Commitment in Dynamic Games," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 26(1), pages 161-73, February.
  18. Kemp, Murray C & Long, Ngo Van & Shimomura, Koji, 1993. "Cyclical and Noncyclical Redistributive Taxation," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 34(2), pages 415-29, May.
  19. Franz Wirl, 1995. "The exploitation of fossil fuels under the threat of global warming and carbon taxes: A dynamic game approach," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 5(4), pages 333-352, June.
  20. Ngo Van Long & Gerhard Sorger, 2009. "A dynamic pricipal-agent problem as a feedback Stackelberg differentioal game," Vienna Economics Papers 0905, University of Vienna, Department of Economics.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Kenji Fujiwara & Ngo Van Long, 2012. "Optimal Tariffs On Exhaustible Resources: The Case Of Quantity-Setting," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 14(04), pages 1240004-1-1.
  2. Ngo Long, 2011. "Dynamic Games in the Economics of Natural Resources: A Survey," Dynamic Games and Applications, Springer, vol. 1(1), pages 115-148, March.
  3. Kenji Fujiwara & Ngo Van Long, 2012. "Optimal Tariffs on Exhaustible Resources: The Case of a Quantity Setting Cartel," CESifo Working Paper Series 3721, CESifo Group Munich.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:cir:cirwor:2010s-16. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Webmaster).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.