Artikel
Implications of financial transaction costs on the real economy: A note
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.
- Language
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Englisch
- Bibliographic citation
-
Journal: Contemporary Economics ; ISSN: 2084-0845 ; Volume: 8 ; Year: 2014 ; Issue: 1 ; Pages: 113-118 ; Warsaw: Vizja Press & IT
- Classification
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Wirtschaft
Firm Behavior: Theory
Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection
Trade: General
Neoclassical Models of Trade
- Subject
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price risk
hedging
transaction cost
financial transaction tax
duopoly
- Event
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Geistige Schöpfung
- (who)
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Pelster, Matthias
- Event
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Veröffentlichung
- (who)
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Vizja Press & IT
- (where)
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Warsaw
- (when)
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2014
- DOI
-
doi:10.5709/ce.1897-9254.135
- Handle
- Last update
-
10.03.2025, 11:44 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Artikel
Associated
- Pelster, Matthias
- Vizja Press & IT
Time of origin
- 2014
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