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Resource extraction by cartels facing constraints on cooperation


  • Wirl, Franz


This paper considers a non-renewable resource cartel facing constraints on cooperation. Although different kinds of constraints are conceivable and some of them are also investigated, the analysis focuses on the case in which cooperation is restricted to sufficiently high quotas. This approach of imposing constraints on cartelization complements papers that assume exogenously when a monopoly ends (in particular Benchekroun, H., Gaudet, G., Van Long, N., 2006. Temporary natural resource cartels. Journal of Environmental Economics and Management 52, 663-674) in two aspects: an endogenous determination when the cartel breaks up and the consequence that it is impossible to shift resource sales between the two regimes.

Suggested Citation

  • Wirl, Franz, 2008. "Resource extraction by cartels facing constraints on cooperation," Resource and Energy Economics, Elsevier, vol. 30(3), pages 409-427, August.
  • Handle: RePEc:eee:resene:v:30:y:2008:i:3:p:409-427

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    References listed on IDEAS

    1. Stiglitz, Joseph E & Dasgupta, Partha, 1981. " Market Structure and Resource Extraction under Uncertainty," Scandinavian Journal of Economics, Wiley Blackwell, vol. 83(2), pages 318-333.
    2. Hoel, Michael, 1983. "Monopoly resource extractions under the presence of predetermined substitute production," Journal of Economic Theory, Elsevier, vol. 30(1), pages 201-212, June.
    3. Nicholas Economides, 2001. "The Microsoft Antitrust Case," Journal of Industry, Competition and Trade, Springer, vol. 1(1), pages 7-39, March.
    4. Franz Wirl, 1991. "(Monopolistic) resource extraction and limit pricing: The market penetration of competitively produced synfuels," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 1(2), pages 157-178, June.
    5. M. A. Adelman, 1990. "The 1990 Oil Shock is Like the Others," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 1-13.
    6. Benchekroun, Hassan & Gaudet, Gerard & Van Long, Ngo, 2006. "Temporary natural resource cartels," Journal of Environmental Economics and Management, Elsevier, vol. 52(3), pages 663-674, November.
    7. Dasgupta, Partha & Gilbert, Richard & Stiglitz, Joseph, 1983. "Strategic Considerations in Invention and Innovation: The Case of Natural Resources," Econometrica, Econometric Society, vol. 51(5), pages 1439-1448, September.
    8. Nicholas Economides, 2001. "The Microsoft Antitrust Case: Rejoinder," Journal of Industry, Competition and Trade, Springer, vol. 1(1), pages 71-79, March.
    9. Stiglitz, Joseph E. & Dasgupta, Partha, 1982. "Market structure and resource depletion: A contribution to the theory of intertemporal monopolistic competition," Journal of Economic Theory, Elsevier, vol. 28(1), pages 128-164, October.
    10. Salo, Seppo & Tahvonen, Olli, 2001. "Oligopoly equilibria in nonrenewable resource markets," Journal of Economic Dynamics and Control, Elsevier, vol. 25(5), pages 671-702, May.
    11. Stephen W. Salant, 1977. "Staving off the backstop: dynamic limit-pricing with a kinked demand curve," International Finance Discussion Papers 110, Board of Governors of the Federal Reserve System (U.S.).
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