A Game Theory Application to Measure Corresponding Social Welfare of Iran Rice Import Tariff Against Export Tax Policy in Thailand

In this study, the linkage between Iran rice imports and Thailand rice exports are analyzed using a game theoretic approach. For this purpose, the impacts of increased world price along with Iran imported tariff policy on social welfare are analyzed for Thailand and Iran. The results show that Nash equilibrium created in a 3% tariff rate for Iran and increased 15% exported price for Thailand. This combination of strategies caused to creation of social welfare equals to 171641.4 rial and 55.298 bat for Iran and Thailand, respectively. Also, with comparison optimal tariff rate (3%) and tariff rate in 2006 year (19%), we can see that there is significant difference between these tariff rates. Therefore, the Iranian government should impose a tariff rate of not more than approximately 3% to maximize the social welfare.