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Feedback equilibria in a dynamic renewable resource oligopoly: Pre-emption, voracity and exhaustion

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  • Lambertini, Luca
  • Mantovani, Andrea

Abstract

We revisit a recent literature on productive asset exploitation describing a differential oligopoly game of resource extraction under static, linear feedback and nonlinear feedback strategies, where we explicitly allow for the possibility of resource exhaustion. 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.

Suggested Citation

  • Lambertini, Luca & Mantovani, Andrea, 2014. "Feedback equilibria in a dynamic renewable resource oligopoly: Pre-emption, voracity and exhaustion," Journal of Economic Dynamics and Control, Elsevier, vol. 47(C), pages 115-122.
  • Handle: RePEc:eee:dyncon:v:47:y:2014:i:c:p:115-122
    DOI: 10.1016/j.jedc.2014.08.010
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    Citations

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    Cited by:

    1. Benchekroun, Hassan & Long, Ngo Van, 2016. "Status concern and the exploitation of common pool renewable resources," Ecological Economics, Elsevier, vol. 125(C), pages 70-82.
    2. repec:eee:jeborg:v:140:y:2017:i:c:p:91-119 is not listed on IDEAS
    3. Benchekroun, H. & Ray Chaudhuri, A. & Tasneem, Dina, 2019. "On the Impact of Trade in a Common Property Renewable Resource Oligopoly," Discussion Paper 2019-021, Tilburg University, Center for Economic Research.
    4. L. Lambertini, 2017. "Regulating the tragedy of commons: nonlinear feedback solutions of a differential game with a dual interpretation," Working Papers wp1096, Dipartimento Scienze Economiche, Universita' di Bologna.
    5. Luca Lambertini & Arsen Palestini, 2018. "Voluntary Export Restraints in a Trade Model with Sticky Price: Linear and Nonlinear Feedback Solutions," Dynamic Games and Applications, Springer, vol. 8(3), pages 507-518, September.
    6. Tasneem, Dina & Engle-Warnick, Jim & Benchekroun, Hassan, 2017. "An experimental study of a common property renewable resource game in continuous time," Journal of Economic Behavior & Organization, Elsevier, vol. 140(C), pages 91-119.
    7. Lambertini, Luca & Mantovani, Andrea, 2016. "On the (in)stability of nonlinear feedback solutions in a dynamic duopoly with renewable resource exploitation," Economics Letters, Elsevier, vol. 143(C), pages 9-12.
    8. L. Lambertini & G. Leitmann, 2017. "On the attainment of the maximum sustainable yield in the Verhulst-Lotka-Volterra model," Working Papers wp1112, Dipartimento Scienze Economiche, Universita' di Bologna.
    9. repec:wsi:igtrxx:v:20:y:2018:i:03:n:s0219198917500359 is not listed on IDEAS
    10. L. Lambertini, 2014. "On the Interplay between Resource Extraction and Polluting Emissions in Oligopoly," Working Papers wp976, Dipartimento Scienze Economiche, Universita' di Bologna.
    11. repec:wsi:igtrxx:v:19:y:2017:i:04:n:s0219198917500189 is not listed on IDEAS
    12. repec:spr:decfin:v:40:y:2017:i:1:d:10.1007_s10203-017-0189-5 is not listed on IDEAS
    13. L. Lambertini, 2015. "Managerial delegation in a dynamic renewable resource oligopoly," Working Papers wp990, Dipartimento Scienze Economiche, Universita' di Bologna.

    More about this item

    Keywords

    Dynamic oligopoly; Renewable resources; Feedback strategies;

    JEL classification:

    • 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

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