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

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  • Luca Lambertini

    () (University of Bologna & ENCORE)

  • Andrea Mantovani

    () (University of Bologna & IEB)

Abstract

We extend Fujiwara’s (2008) model to describe a differential oligopoly game of resource extraction under static, linear feedback and nonlinear feedback strategies, generalising his result that steady state feedback outputs are lower than monopoly and static oligopoly equilibrium outputs for any number of firms. Additionally, 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

  • Luca Lambertini & Andrea Mantovani, 2013. "Feedback equilibria in a dynamic renewable resource oligopoly: pre-emption, voracity and exhaustion," Working Papers 2013/26, Institut d'Economia de Barcelona (IEB).
  • Handle: RePEc:ieb:wpaper:2013/6/doc2013-26
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    References listed on IDEAS

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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. 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.
    4. L. Lambertini & A. Palestini, 2017. "Voluntary Export Restraints in a Trade Model with Sticky Price: Linear and Nonlinear Feedback Solutions," Working Papers wp1109, Dipartimento Scienze Economiche, Universita' di Bologna.
    5. 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.
    6. 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.
    7. 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.
    8. L. Lambertini, 2014. "On the Interplay between Resource Extraction and Polluting Emissions in Oligopoly," Working Papers wp976, Dipartimento Scienze Economiche, Universita' di Bologna.
    9. repec:wsi:igtrxx:v:19:y:2017:i:04:n:s0219198917500189 is not listed on IDEAS
    10. repec:spr:decfin:v:40:y:2017:i:1:d:10.1007_s10203-017-0189-5 is not listed on IDEAS
    11. 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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