Competition in Markets for Depletable Resources with Setup Costs
AbstractThis paper analyzes the impact on exhaustible resource markets of setup costs, a sparsely analyzed category of nonconvex production technologies. This paper proves that, even under idealized circumstances for competition, a competitive equilibrium will fail to exist in the presence of setup costs, for any utility and cost functions such that a planner would exploit exhaustible resource pools sequentially. Copyright Springer 2005
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Bibliographic InfoArticle provided by European Association of Environmental and Resource Economists in its journal Environmental & Resource Economics.
Volume (Year): 30 (2005)
Issue (Month): 3 (03)
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Web page: http://www.springerlink.com/link.asp?id=100263
competitive equilibrium; natural resources; non-convexities; setup costs; shutdown costs;
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- Robert Cairns, 2008. "Exhaustible Resources, Non-Convexity and Competitive Equilibrium," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 40(2), pages 177-193, June.
- Mason, Charles F., 2012.
"On equilibrium in resource markets with scale economies and stochastic prices,"
Journal of Environmental Economics and Management,
Elsevier, vol. 64(3), pages 288-300.
- Charles F Mason, 2012. "On Equilibrium in Resource Markets with Scale Economies and Stochastic Prices," OxCarre Working Papers 073, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
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