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Economics Research International
Volume 2011 (2011), Article ID 147357, 6 pages
http://dx.doi.org/10.1155/2011/147357
Research Article

Tariffs Ranking in Mixed Oligopoly with Revenue Constraint

1Department of Applied Economics, National University of Kaohsiung, Kaohsiung 41148, Taiwan
2Economics Division, SinoAsia Economic and Management Foundation, Kaohsiung 41148, Taiwan
3Hanqing Advanced Institute of Economic and Finance, Renmin University of China, Beijing 100872, China
4Department of International Business, National Kaohsiung University of Applied Science, Kaohsiung 80778, Taiwan

Received 3 December 2010; Revised 28 June 2011; Accepted 29 June 2011

Academic Editor: Yew-Kwang Ng

Copyright © 2011 Leonard F. S. Wang et al. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

Utilizing linear mixed oligopoly model, this paper explores the magnitude of the maximum-revenue tariff, optimum-welfare tariff, and revenue-constrained optimal tariff that is especially designed for the consideration of the bureaucratic inefficiency. In particular, the tariff ranking issue is examined under both cases of Cournot competition and domestic public leadership. We found that, under Cournot competition, the optimum-welfare tariff is the highest and it is followed by the revenue-constrained optimal tariff while the maximum-revenue tariff is the lowest. But, under Stackelberg public leadership, if the domestic private firms are fewer than the foreign firms, the maximum-revenue tariff becomes the highest and the optimum-welfare exceeds the revenue-constrained optimal tariff.