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Monopoly extraction of a nonrenewable resource facing capacity constrained renewable competition

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  • Wang, Min
  • Zhao, Jinhua

Abstract

This paper studies monopoly extraction of a nonrenewable resource with the presence of a competitively supplied capacity constrained renewable substitute. The monopolist staves off the renewable supply when the latter becomes competitive and then lets the resource price jump up.

Suggested Citation

  • Wang, Min & Zhao, Jinhua, 2013. "Monopoly extraction of a nonrenewable resource facing capacity constrained renewable competition," Economics Letters, Elsevier, vol. 120(3), pages 503-508.
    • Handle: RePEc:eee:ecolet:v:120:y:2013:i:3:p:503-508
    DOI: 10.1016/j.econlet.2013.06.013
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    References listed on IDEAS

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    Cited by:

    1. Oskar Lecuyer & Adrien Vogt-Schilb, 2013. "Assessing and ordering investments in polluting fossil-fueled and zero-carbon capital," CIRED Working Papers hal-00850680, HAL.
    2. Wang, Min & Zhao, Jinhua, 2018. "Are renewable energy policies climate friendly? The role of capacity constraints and market power," Journal of Environmental Economics and Management, Elsevier, vol. 90(C), pages 41-60.
    3. Benchekroun, Hassan & van der Meijden, Gerard & Withagen, Cees, 2019. "An oligopoly-fringe non-renewable resource game in the presence of a renewable substitute," Journal of Economic Dynamics and Control, Elsevier, vol. 105(C), pages 1-20.
    4. van der Meijden, Gerard & Withagen, Cees, 2020. "Monopoly, unilateral climate policies and limit pricing," Journal of Economic Dynamics and Control, Elsevier, vol. 120(C).
    5. Renaud Coulomb & Oskar Lecuyer & Adrien Vogt-Schilb, 2019. "Optimal Transition from Coal to Gas and Renewable Power Under Capacity Constraints and Adjustment Costs," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(2), pages 557-590, June.
    6. van der Meijden, Gerard & Withagen, Cees, 2019. "Limit pricing, climate policies, and imperfect substitution," Resource and Energy Economics, Elsevier, vol. 58(C).
    7. Gerard Meijden & Frederick Ploeg & Cees Withagen, 2017. "Frontiers of Climate Change Economics," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 68(1), pages 1-14, September.
    8. Hart, Rob & Gars, Johan, 2022. "The black paradox," European Economic Review, Elsevier, vol. 148(C).

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    Keywords

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    JEL classification:

    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
    • Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation

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