Karp, Larry and Newbery, David M.
Optimal tariffs on exhaustible resources.
Journal of International Economics, 30, (3-4), . (doi:10.1016/0022-1996(91)90023-Y).
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We characterize the Markov perfect equilibria of two games in which oligopsonistic importers of an exhaustible resource confront competitive suppliers who 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.
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