OPTIMAL TARIFFS ON EXHAUSTIBLE RESOURCES: THE CASE OF QUANTITY-SETTING

Constructing a dynamic game model of trade of an exhaustible resource, this paper compares feedback Nash and Stackelberg equilibria. We consider two different leadership scenarios: leadership by the importing country, and leadership by the exporting country. We numerically show that as compared to the Nash equilibrium, both countries are better off if the importing country is a leader, but that the follower is worse off if the exporting country is a leader. Consequently, the world welfare is highest under the importing country's leadership and lowest under the exporting country's leadership.

STACKELBERG LEADERSHIP IN A MARKETING CHANNEL

This paper provides an answer to the question who should, if any, lead a marketing channel? We consider a channel consisting of one manufacturer and one retailer where each player controls his advertising rate and margin. Supposing that advertising has a carry over effect on demand, we adopt a dynamic model. Nash and Stackelberg equilibria are characterised and outcomes compared with an efficient coordinated solution. Our findings suggest that manufacturer's leadership reduces inefficiency in a channel and is more beneficial to the consumer.