Mining and Incentive Concession Contracts
This paper studies the design of a mining concession contract as a multi-period autoselection problem where production is the depletion of a non renewable resource. As compared to symmetric information, we show that overproduction (resp. underproduction) is optimal in the initial phase (resp. terminal phase ) of the resource extraction program. Also, asymmetric information lengthens the contract duration but reduces the scarcity rent. Finally, when there are several agents competing for contract bid, we show that optimal auctioning could be used to award the concession, assigning the lowest cost agent to carry out the extraction.
|Date of creation:||2003|
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- Baron, David P. & Besanko, David, 1984. "Regulation and information in a continuing relationship," Information Economics and Policy, Elsevier, vol. 1(3), pages 267-302.
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- Laffont, Jean-Jacques & Tirole, Jean, 1987.
"Auctioning Incentive Contracts,"
Journal of Political Economy,
University of Chicago Press, vol. 95(5), pages 921-937, October.
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- Petter Osmundsen, 1998. "Dynamic Taxation of Non-renewable Natural Resources Under Asymmetric Information About Reserves," Canadian Journal of Economics, Canadian Economics Association, vol. 31(4), pages 933-951, November.
- Jean-Jacques Laffont & Jean Tirole, 1993. "A Theory of Incentives in Procurement and Regulation," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121743, December.
- David Levhari & Nissan Liviatan, 1977. "Notes on Hotelling's Economics of Exhaustible Resources," Canadian Journal of Economics, Canadian Economics Association, vol. 10(2), pages 177-192, May.
- Jean-Christophe Poudou & Lionel Thomas, 2000. "Concession minière et asymétrie d'information," Économie et Prévision, Programme National Persée, vol. 143(2), pages 129-138.
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