Implications of financial transaction costs on the real economy: A note
| Autor: | Matthias Pelster |
|---|---|
| Jazyk: | angličtina |
| Rok vydání: | 2014 |
| Předmět: | |
| Zdroj: | Contemporary Economics, Vol 8, Iss 1, Pp 1-118 (2014) |
| Druh dokumentu: | article |
| ISSN: | 2084-0845 1897-9254 |
| DOI: | 10.5709/ce.1897-9254.135 |
| Popis: | This note studies the influence of a financial transaction tax and transaction costs on the optimal production and hedging strategies of a duopoly. Firms are exposed to demand uncertainty that leads to price risk and can hedge their risk exposure on a forward market. However, the forward position is subject to transaction costs. We investigate two settings: first, we explore the Cournot duopoly with a simultaneous hedging opportunity; second, we analyze the case with a sequential forward market. We show that in both settings transaction costs lead to a less competitive market and that prices increase as the producers limit their output. |
| Databáze: | Directory of Open Access Journals |
| Externí odkaz: |
|