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On Capturing Rent from a Non-Renewable Resource International Monopoly

Author

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  • Rubio Jorge Santiago J.

    (UNIVERSITY OF PENNSYLVANIA UNIVERSITY OF VALENCIA)

Abstract

In this working paper we model the case of an international non-renewable resource monopolist as a dynamic game between a monopolist and importing countries governments, and we investigate whether a tariff on resource imports can be advantageous for the consumers of the importing countries when the monopolist sets the price and the importing countries governments act in a non-cooperative way. We find that a tariff is advantageous for the consumers even when there is no commitment to the trade policy, although the part of the rent that can be reaped by the importing countries decreases substantially with the number of importing countries. The optimality of the tariff in our dynamic game is explained by the fact that through the tariff the governments of the importing countries can influence the dynamics of the accumulated extractions and hence the extraction costs and the evolution of the monopolist price.

Suggested Citation

  • Rubio Jorge Santiago J., 2007. "On Capturing Rent from a Non-Renewable Resource International Monopoly," Working Papers 201089, Fundacion BBVA / BBVA Foundation.
    • Handle: RePEc:fbb:wpaper:201089
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    Cited by:

    1. Santiago Rubio, 2011. "On Capturing Rent from a Non-renewable Resource International Monopoly: Prices Versus Quantities," Dynamic Games and Applications, Springer, vol. 1(4), pages 558-580, December.
    2. Achim Voss & Mark Schopf, 2014. "Lobbying over Exhaustible-Resource Extraction," Working Papers CIE 80, Paderborn University, CIE Center for International Economics.

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