Technology Adoption in Nonrenewable Resource Management
AbstractNonrenewable resource scarcity has been a traditional concern when designing optimal growth models. Technological change has played an important role in those models, since its presence is assumed to mitigate the depletion effect on extraction paths over time. We formalize the general problem of a competitive nonrenewable resource extracting firm to analyze optimal extraction behavior and technology adoption when adoption is costly, both in a deterministic and a stochastic environment, when the firm either anticipates adoption or not. Based on a quadratic extraction cost function, our results do not support the traditional view according to which the firm will only incur in an adoption cost when the stock is depleted enough.
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Bibliographic InfoPaper provided by Centro de Estudios Andaluces in its series Economic Working Papers at Centro de Estudios Andaluces with number E2004/16.
Length: 46 pages
Date of creation: 2004
Date of revision:
nonrenewable resources; technology adoption; depletion effect; cost of adoption.;
Find related papers by JEL classification:
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
- Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
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