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Technology adoption in nonrenewable resource management

Listed author(s):
  • Cunha-e-Sá, Maria A.
  • Balcão Reis, Ana
  • Roseta-Palma, Catarina
Registered author(s):

Technological change has played an important role in models of nonrenewable resource management, since its presence mitigates the depletion effect on extraction costs over time. We formalize the problem of a competitive nonrenewable resource extracting firm faced with the possibility of technology adoption. Based on a quadratic extraction cost function, our results show that the expected net benefits from adoption increase both with the size of the resource stock and with prices. A boundary that separates the region where expected net benefits are positive from the one where they are negative is derived.

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File URL: http://www.sciencedirect.com/science/article/pii/S0140988308001588
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Article provided by Elsevier in its journal Energy Economics.

Volume (Year): 31 (2009)
Issue (Month): 2 (March)
Pages: 235-239

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Handle: RePEc:eee:eneeco:v:31:y:2009:i:2:p:235-239
Contact details of provider: Web page: http://www.elsevier.com/locate/eneco

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  1. Bronwyn H. Hall & Beethika Khan, 2004. "Adoption of New Technology," Development and Comp Systems 0401001, EconWPA.
  2. Maria A. Cunha-e-Sá & Ana Balcão Reis & Catarina Roseta-Palma, 2004. "Technology Adoption in Nonrenewable Resource Management," Economic Working Papers at Centro de Estudios Andaluces E2004/16, Centro de Estudios Andaluces.
  3. Farzin, Y.H. & Huisman, K.J.M. & Kort, P.M., 1996. "Optimal Timing of Technology Adoption," Discussion Paper 1996-72, Tilburg University, Center for Economic Research.
  4. Doraszelski, Ulrich, 2004. "Innovations, improvements, and the optimal adoption of new technologies," Journal of Economic Dynamics and Control, Elsevier, vol. 28(7), pages 1461-1480, April.
  5. Managi, Shunsuke & Opaluch, James J. & Jin, Di & Grigalunas, Thomas A., 2004. "Technological change and depletion in offshore oil and gas," Journal of Environmental Economics and Management, Elsevier, vol. 47(2), pages 388-409, March.
  6. Farzin, Y H, 1992. "The Time Path of Scarcity Rent in the Theory of Exhaustible Resources," Economic Journal, Royal Economic Society, vol. 102(413), pages 813-830, July.
  7. Farzin, Y. H., 2001. "The impact of oil price on additions to US proven reserves," Resource and Energy Economics, Elsevier, vol. 23(3), pages 271-292, July.
  8. Farzin Y. H., 1995. "Technological Change and the Dynamics of Resource Scarcity Measures," Journal of Environmental Economics and Management, Elsevier, vol. 29(1), pages 105-120, July.
  9. Balcer, Yves & Lippman, Steven A., 1984. "Technological expectations and adoption of improved technology," Journal of Economic Theory, Elsevier, vol. 34(2), pages 292-318, December.
  10. Avinash K. Dixit & Robert S. Pindyck, 1994. "Investment under Uncertainty," Economics Books, Princeton University Press, edition 1, number 5474.
  11. Abel, Andrew B, 1983. "Optimal Investment under Uncertainty," American Economic Review, American Economic Association, vol. 73(1), pages 228-233, March.
  12. Tilton, John & Landsberg, Hans, 1997. "Innovation, Productivity Growth, and the Survival of the U.S. Copper Industry," Discussion Papers dp-97-41, Resources For the Future.
  13. Jeffrey A. Krautkraemer, 1998. "Nonrenewable Resource Scarcity," Journal of Economic Literature, American Economic Association, vol. 36(4), pages 2065-2107, December.
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