Advanced Search
MyIDEAS: Login to save this paper or follow this series

From Hotelling to Backstop Technology

Contents:

Author Info

Abstract

Hotelling's conceptual framework is expanded to incorporate the effects of a backstop technology on the planning horizon of the suppliers of an exhaustible resource and its price and quantity trajectories. It is shown that in the non-trivial case, the presence of a backstop technology shortens the planning horizon of the suppliers of the exhaustible resource in accordance with the resource suppliers' rate of time preference, backstop technology's rate of irnprovement and ratio of the initial resource spot price to the initial average production cost of the backstop substitute. As expected the presence of a backstop technology also lowers the spot prices of the exhaustible resource and accelerates its extraction and depletion. However, a decline of the initial average cost of producing the backstop substitute by a dollar leads to a decline of the exhaustible resource's initial spot price by less than a dollar.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. 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.uow.edu.au/content/groups/public/@web/@commerce/@econ/documents/doc/uow012095.pdf
Download Restriction: no

Bibliographic Info

Paper provided by School of Economics, University of Wollongong, NSW, Australia in its series Economics Working Papers with number wp00-04.

as in new window
Length: 13 pages
Date of creation: 2000
Date of revision:
Handle: RePEc:uow:depec1:wp00-04

Contact details of provider:
Postal: School of Economics, University of Wollongong, Northfields Avenue, Wollongong NSW 2522 Australia
Phone: +612 4221-3659
Fax: +612 4221-3725
Web page: http://business.uow.edu.au/econ/index.html
More information through EDIRC

Related research

Keywords: TECHNOLOGY ; PRICING ; ECONOMIC MODELS;

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:uow:depec1:wp00-04. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peter Siminski).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.