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Extracting Information or Resource ? The Hotelling Rule Revisited under Asym- metric Information

Author

Listed:
  • David Martimort

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique)

  • Jérôme Pouyet

    (THEMA - Théorie économique, modélisation et applications - UCP - Université de Cergy Pontoise - Université Paris-Seine - CNRS - Centre National de la Recherche Scientifique)

  • Francesco Ricci

    (UMR ART-Dev - Acteurs, Ressources et Territoires dans le Développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - UPVM - Université Paul-Valéry - Montpellier 3 - UPVD - Université de Perpignan Via Domitia - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique)

Abstract

A concessionaire has private information on the initial stock of resource. A "virtual Hotelling rule" describes how the resource price evolves over time and how extraction costs are compounded with information costs along the optimal extraction path. Fields which are heterogeneous in terms of their initial stocks follow different extraction paths. Resource might be left unexploited in the long run as a way to foster incentives. The optimal contract may sometimes be implemented through royalties and license fees. With a market of concessionaires, asymmetric information leads to a "virtual Herfindahl principle" and to another form of heterogeneity across active concessionaires.

Suggested Citation

  • David Martimort & Jérôme Pouyet & Francesco Ricci, 2018. "Extracting Information or Resource ? The Hotelling Rule Revisited under Asym- metric Information," PSE-Ecole d'économie de Paris (Postprint) halshs-01631594, HAL.
    • Handle: RePEc:hal:pseptp:halshs-01631594
    DOI: 10.1111/1756-2171.12233
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    Cited by:

    1. Egger, Peter H. & Keuschnigg, Christian, 2024. "Resource dependence, recycling, and trade," Journal of Environmental Economics and Management, Elsevier, vol. 128(C).
    2. Ing, Julie, 2020. "Adverse selection, commitment and exhaustible resource taxation," Resource and Energy Economics, Elsevier, vol. 61(C).
    3. David Martimort & Jerome Pouyet & Francesco Ricci, 2018. "Contracts for the Management of a Non-Renewable Resource under Asymmetric Information and Structural Price Breaks," Annals of Economics and Statistics, GENES, issue 132, pages 81-103.
    4. Cotrina-Teatino, Marco A. & Marquina-Araujo, Jairo J., 2024. "Hotelling rule in non-renewable resources: A bibliometric and systematic literature review analysis," Resources Policy, Elsevier, vol. 98(C).
    5. Lappi, Pauli, 2020. "On optimal extraction under asymmetric information over reclamation costs," Journal of Economic Dynamics and Control, Elsevier, vol. 119(C).

    More about this item

    JEL classification:

    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
    • Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)

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