Optimal Contracts for Exploration with Cost Recovery of an Exhaustible Natural Resource Under Asymmetric Information
AbstractExploration of an exhaustible resource with cost recovery under asymmetric information about cost is modeled and analyzed employing Principal-Agent theory. Allocation of lower than full information level of effort for the high-cost firms is found socially optimal. However, distortion is less in a two-stage process of exploration and extraction.
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Bibliographic InfoPaper provided by University of Maryland, Department of Agricultural and Resource Economics in its series Working Papers with number 28578.
Date of creation: 2006
Date of revision:
Resource /Energy Economics and Policy;
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