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Strategic Considerations of Critical Mineral Depletion and Recycling Under Markovian Competition

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  • Weihua Ruan
  • Benteng Zou

Abstract

Understanding the supply and recycling of critical minerals is crucial for advancing clean technologies and mitigating resource depletion. The strategic decisions of exporting and importing countries regarding critical minerals are modeled as a differential game. The Markovian subgame perfect Nash equilibrium of this game is characterized by a system of nonlinear partial differential Hamilton‐Jacobi‐Bellman (HJB) equations. Mathematical and numerical analysis reveal existence of multiple subgame perfect Nash equilibria. The main finding of this analysis is that the market can rely on virgin resources, recyclable reserves (provided recycling technology is available), or a combination of both. However, it is also possible that a monopoly may halt supply before exhausting its reserves if exploitation costs are prohibitively high and/or if the recyclable resources are near depletion. This situation accelerates the monopoly's return to a monopoly position.

Suggested Citation

  • Weihua Ruan & Benteng Zou, 2025. "Strategic Considerations of Critical Mineral Depletion and Recycling Under Markovian Competition," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 27(6), December.
    • Handle: RePEc:bla:jpbect:v:27:y:2025:i:6:n:e70090
    DOI: 10.1111/jpet.70090
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