When additional resource stocks reduce welfare
AbstractIn the dominant firm model, we show that an increase of the fringe's reserves of a nonrenewable resource may lead to a decrease in aggregate discounted social welfare. This happens when the difference between the fringe's extraction cost and the dominant firm's is positive and large enough. We also show that welfare might decrease if the fringe's marginal extraction cost decreases.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Environmental Economics and Management.
Volume (Year): 59 (2010)
Issue (Month): 1 (January)
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Web page: http://www.elsevier.com/locate/inca/622870
Nonrenewable resources Dominant firm versus fringe Nash equilibrium;
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