Dynamic Taxation of Non-renewable Natural Resources Under Asymmetric Information About Reserves
AbstractOptimal regulation is developed for a case with type-dependent dynamics in costs. In exploiting nonrenewable natural resources, a government faces the problem that extraction companies possess private information about the size of the reserves. Optimal contracts, in a two-period framework, distort both the extent and the pace of depletion. The regulatory optimum is implementable by a menu of tangent planes, generated by license fees and royalties, or by a corporate income tax system containing type-dependent depletion allowances and tax-exempted income levels. If the terminal time is endogenized, it is optimal also to distort the number of extraction periods.
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Bibliographic InfoArticle provided by Canadian Economics Association in its journal Canadian Journal of Economics.
Volume (Year): 31 (1998)
Issue (Month): 4 (November)
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Postal: Canadian Economics Association Prof. Steven Ambler, Secretary-Treasurer c/o Olivier Lebert, CEA/CJE/CPP Office C.P. 35006, 1221 Fleury Est Montréal, Québec, Canada H2C 3K4
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- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
- L72 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Other Nonrenewable Resources
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- Julie Ing, 2012. "The impact of commitment on nonrenewable resources management with asymmetric information on costs," Working Papers 1205, Groupe d'Analyse et de Théorie Economique (GATE), Centre national de la recherche scientifique (CNRS), Université Lyon 2, Ecole Normale Supérieure.
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