The Extractive Firm's Cost Spillover Tax for the Extended Hotelling Model

John M. Hartwick, Andrei V. Bazhanov and Zhen Song ()

No 1169, Working Papers from Queen's University, Department of Economics

Abstract: We consider a competitive extraction industry comprising many small firms, each with a slightly different quality of mineral holdings. With "rapidly" declining quality of holding per firm, we observe rent declining over an interval. We then take up the familiar planning model and isolate the tax required to make decentralized extraction by many distinct, competitive firms replicate the planning solution.

Keywords: exhaustible resources; resource rent; competitive extraction; corrective tax (search for similar items in EconPapers)
JEL-codes: Q31 D41 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ene and nep-env
Date: Written
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