Implications of Financial Transaction Costs on the Real Economy: A Note

• Autorzy: Matthias Pelster
• Języki publikacji: EN

Abstrakty

EN

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. (original abstract)

Słowa kluczowe

EN

Foreign Currency Transactions; Transaction cost; Price risk; Production costs

PL

Transakcje walutowe; Koszty transakcyjne; Ryzyko cenowe; Koszty produkcji

• Czasopismo: Contemporary Economics
• Rocznik: 2014
• Tom: 8
• Numer: nr 1
• Strony: 113--118

Twórcy

autor

Matthias Pelster

• Technical University of Dortmund, Germany

Bibliografia

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