On oligopolistic markets for nonrenewable natural resources
Noncooperative oligopoly behavior in nonrenewable resource markets is analyzed under stationary conditions assuming perfect information. The existence of Cournot-Nash equilibria in output paths is established under standard cost and demand assumptions, and a number of comparative dynamic results are obtained. If all suppliers have the same costs, for instance, and total reserves are fixed, either increasing the number of suppliers or equalizing their reserve holdings causes more rapid resource use. If suppliers' costs differ, it is shown that equilibrium involves inefficient production; high-cost reserves may even be exhausted before low-cost reserves.
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|Date of creation:||1979|
|Contact details of provider:|| Postal: MASSACHUSETTS INSTITUTE OF TECHNOLOGY (MIT), SLOAN SCHOOL OF MANAGEMENT, 50 MEMORIAL DRIVE CAMBRIDGE MASSACHUSETTS 02142 USA|
Web page: http://mitsloan.mit.edu/
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- Milton C. Weinstein & Richard J. Zeckhauser, 1975. "The Optimal Consumption of Depletable Natural Resources," The Quarterly Journal of Economics, Oxford University Press, vol. 89(3), pages 371-392.
- Salant, Stephen W, 1976. "Exhaustible Resources and Industrial Structure: A Nash-Cournot Approach to the World Oil Market," Journal of Political Economy, University of Chicago Press, vol. 84(5), pages 1079-1093, October.
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"The Optimal Exploitation of an Unknown Reserve,"
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"On the existence of Cournot equilbrium without concave profit functions,"
Journal of Economic Theory,
Elsevier, vol. 13(1), pages 112-117, August.
- ROBERTS, John, . "On the existence of Cournot equilibrium without concave profit functions," CORE Discussion Papers RP 260, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Stiglitz, Joseph E, 1976. "Monopoly and the Rate of Extraction of Exhaustible Resources," American Economic Review, American Economic Association, vol. 66(4), pages 655-661, September.
- Robert S. Pindyck, 1977. "Cartel Pricing and the Structure of the World Bauxite Market," Bell Journal of Economics, The RAND Corporation, vol. 8(2), pages 343-360, Autumn.
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