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|
|Date of revision:|
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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.
- Solow, Robert M, 1974. "The Economics of Resources or the Resources of Economics," American Economic Review, American Economic Association, vol. 64(2), pages 1-14, May.
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CORE Discussion Papers RP
260, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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- Koji Okuguchi, 1973. "Quasi-Competitiveness and Cournot Oligopoly," Review of Economic Studies, Oxford University Press, vol. 40(1), pages 145-148.
- Glenn C. Loury, 1978. "The Optimal Exploitation of an Unknown Reserve," Review of Economic Studies, Oxford University Press, vol. 45(3), pages 621-636.
- Stiglitz, Joseph E, 1976. "Monopoly and the Rate of Extraction of Exhaustible Resources," American Economic Review, American Economic Association, vol. 66(4), pages 655-61, September.
- 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 1079-93, October.
- 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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