Feedback equilibria in a dynamic renewable resource oligopoly: pre-emption, voracity and exhaustion
AbstractWe extend Fujiwara’s (2008) model to describe a differential oligopoly game of resource extraction under static, linear feedback and nonlinear feedback strategies, generalising his result that steady state feedback outputs are lower than monopoly and static oligopoly equilibrium outputs for any number of firms. Additionally, we show that (i) feedback rules entail resource exhaustion for a finite number of firms; and (ii) feedback strategies are more aggressive than static ones as long as the resource stock is large enough, in accordance with the acquired view based on the traditional pre-emption argument associated with feedback information.
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Bibliographic InfoPaper provided by Institut d'Economia de Barcelona (IEB) in its series Working Papers with number 2013/26.
Length: 19 pages
Date of creation: 2013
Date of revision:
Dynamic oligopoly; renewable resources; feedback strategies;
Other versions of this item:
- L. Lambertini & A. Mantovani, 2013. "Feedback equilibria in a dynamic renewable resource oligopoly: pre-emption, voracity and exhaustion," Working Papers wp890, Dipartimento Scienze Economiche, Universita' di Bologna.
- Luca Lambertini & Andrea Mantovani, 2013. "Feedback Equilibria in a Dynamic Renewable Resource Oligopoly: Pre-Emption, Voracity and Exhaustion," Working Paper Series 56_13, The Rimini Centre for Economic Analysis.
- C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-08-10 (All new papers)
- NEP-BEC-2013-08-10 (Business Economics)
- NEP-COM-2013-08-10 (Industrial Competition)
- NEP-GTH-2013-08-10 (Game Theory)
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