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| Author: | Karp, L. Newbery, D. M. |
| Title: | Optimal tariffs on exhaustible resources |
| Journal: | Journal of International Economics
1991 : MAY, VOL. 30:3-4, p. 285-299 |
| Index terms: | TARIFFS OPTIMIZATION RESOURCES GAME THEORY RATIONAL EXPECTATIONS ARBITRATION MARKETS COMPETITION |
| Language: | eng |
| Abstract: | The Markov perfect equilibria for two games in which dominant buyers use tariffs to exert market power when confronted by competitive producers are derived and characterized. Competitive suppliers have rational expectations. The games differ only in the timing of moves, or the speed with which participants can adjust their plans. The optimal tariff when sellers move first (are less flexible) differs considerably from that in which buyers move first, and sellers retain more control over intertemporal arbitrage opportunities. If the initial stock is small, buyers suffer a disadvantage from being the first-mover, this is reversed if the stock is large. Some techniques that are useful in studying imperfectly competitive markets are illustrated. |
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