Food Supply Management and Tariffication: A Game Theoretic Approach
We compare the current Canadian supply management regime in which producers and importers benefit from rent-seeking activities that set production quota and import quota levels with those under a tariff, in which producers partakes in rent-seeking activities in order to induce the government to introduce a favorable tariff regime. We explore two different quota-setting games: (1) the import quota and production quota are set at a level that arises from a Cournot-Nash equilibrium between producers and importers; and (2) the producer marketing board acts as a Stackelberg leader, taking into account the importersÂ’ reaction to its production quota level. We compare these quota-setting games with two different tariff-setting games: (1) A non-cooperative game in which the government sets the tariff at a level that maximizes tariff revenue; and (2) A cooperative game in which producers, through rent-seeking activities, induce the government to set the tariff at a level that maximizes joint government and producer rents.
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Volume (Year): 1 (2002)
Issue (Month): 1 (October)
Pages: 1-21
| Handle: | RePEc:bpj:bjafio:v:1:y:2002:i:1:n:4 |
| Contact details of provider: | Web page: http://www.degruyter.com
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| Order Information: | Web: http://www.degruyter.com/view/j/jafio |
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