Food supply management and tariffication: A game theoretic approach

Troy Schmitz, Andrew Schmitz

Research output: Contribution to journalArticle

2 Scopus citations

Abstract

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 importers' 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.

Original languageEnglish (US)
JournalJournal of Agricultural and Food Industrial Organization
Volume1
Issue number1
StatePublished - Dec 1 2003

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ASJC Scopus subject areas

  • Food Science
  • Business, Management and Accounting(all)
  • Economics and Econometrics

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