Implications of financial transaction costs on the real economy: A note
Publikation: Beiträge in Zeitschriften › Zeitschriftenaufsätze › Forschung › begutachtet
Authors
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.
Originalsprache | Englisch |
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Zeitschrift | Contemporary Economics |
Jahrgang | 8 |
Ausgabenummer | 1 |
Seiten (von - bis) | 113-118 |
Anzahl der Seiten | 6 |
ISSN | 2084-0845 |
DOIs | |
Publikationsstatus | Erschienen - 31.03.2014 |
Extern publiziert | Ja |
- Empirische Wirtschaftsforschung/Statistik