This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Strategic Resource Dependence

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Reyer Gerlagh (University of Manchester)
Matti Liski (Helsinki School of Economics)
Abstract

We consider a situation where an exhaustible-resource seller faces demand from a buyer who has a perfect substitute but there is a time-to-build delay for the substitute. We that find in this simple framework the basic implications of the Hotelling model (1931) are reversed: over time the stock declines but supplies increase up to the point where the buyer decides to switch. Under such a threat of demand change, the supply does not reflect the true current resource scarcity but leads to increased future scarcity, felt during the transition to the substitute supplies. The analysis suggests a perspective on costs of oil dependence.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.feem.it/NR/rdonlyres/79C7C754-424B-400C-A128-C832212EBA3D/2667/7208.pdf
File Format: application/pdf
File Function:
Download Restriction: no

Publisher Info
Paper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2008.72.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length:
Date of creation: Sep 2008
Date of revision:
Handle: RePEc:fem:femwpa:2008.72

Contact details of provider:
Postal: Corso Magenta, 63 - 20123 Milan
Phone: 0039-2-52036934
Fax: 0039-2-52036946
Email:
Web page: http://www.feem.it/
More information through EDIRC

For technical questions regarding this item, or to correct its listing, contact: (barbara racah).

Related research
Keywords: Dynamic Bilateral Monopoly; Markov-Perfect Equilibrium; Depletable Resources; Energy; Alternative Fuels; Oil Dependence;

Other versions of this item:

Find related papers by JEL classification:
D4 - Microeconomics - - Market Structure and Pricing
D9 - Microeconomics - - Intertemporal Choice and Growth
O33 - Economic Development, Technological Change, and Growth - - Technological Change - - - Technological Change: Choices and Consequences; Diffusion Processes
Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General

This paper has been announced in the following NEP Reports:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. William D. Nordhaus, 1973. "The Allocation of Energy Resources," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 4(1973-3), pages 529-576. [Downloadable!]
  2. Karp, Larry & Newbery, David M., 1993. "Intertemporal consistency issues in depletable resources," Handbook of Natural Resource and Energy Economics, in: A. V. Kneese† & J. L. Sweeney (ed.), Handbook of Natural Resource and Energy Economics, edition 1, volume 3, chapter 19, pages 881-931 Elsevier. [Downloadable!] (restricted)
    Other versions:
  3. Hoel, Michael, 1983. "Monopoly resource extractions under the presence of predetermined substitute production," Journal of Economic Theory, Elsevier, vol. 30(1), pages 201-212, June. [Downloadable!] (restricted)
  4. Tahvonen, Olli & Salo, Seppo, 2001. "Economic growth and transitions between renewable and nonrenewable energy resources," European Economic Review, Elsevier, vol. 45(8), pages 1379-1398, August. [Downloadable!] (restricted)
  5. Johannes Horner & Morton I. Kamien, 2004. "Coase and Hotelling: A Meeting of the Minds," Journal of Political Economy, University of Chicago Press, vol. 112(3), pages 718-723, June.
  6. Dutta, P.K., 1991. "What Do Discounted Optima Converge To? A Theory of Discount Rate Asymptotics in Economic Models," RCER Working Papers 264, University of Rochester - Center for Economic Research (RCER).
  7. Dutta, Prajit K., 1991. "What do discounted optima converge to?: A theory of discount rate asymptotics in economic models," Journal of Economic Theory, Elsevier, vol. 55(1), pages 64-94, October. [Downloadable!] (restricted)
  8. Salo, Seppo & Tahvonen, Olli, 2001. "Oligopoly equilibria in nonrenewable resource markets," Journal of Economic Dynamics and Control, Elsevier, vol. 25(5), pages 671-702, May. [Downloadable!] (restricted)
  9. Maskin, Eric S & Newbery, David M, 1990. "Disadvantageous Oil Tariffs and Dynamic Consistency," American Economic Review, American Economic Association, vol. 80(1), pages 143-56, March.
  10. Felli, Leonardo & Harris, Christopher, 1996. "Learning, Wage Dynamics, and Firm-Specific Human Capital," Journal of Political Economy, University of Chicago Press, vol. 104(4), pages 838-68, August. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Juan Pablo Montero & Matti Liski., 2009. "On Coase and Hotelling," Documentos de Trabajo 351, Instituto de Economía. Pontificia Universidad Católica de Chile.. [Downloadable!]
  2. Matti Liski & Juan-Pablo Montero, 2009. "On Coase and Hotelling," Working Papers 0903, Massachusetts Institute of Technology, Center for Energy and Environmental Policy Research. [Downloadable!]
Statistics
Access and download statistics

Did you know? All top Economics journals are listed on RePEc.

This page was last updated on 2009-12-3.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.