On von Stackelberg Leadership in a Cartel-Fringe-Renewables' Model of Exhaustible Resource Extraction

Simon Elgersma, Hassan Benchekroun, Gerard Cornelis van der Meijden and Cees A. Withagen

No 12648, CESifo Working Paper Series from CESifo

Abstract: We characterize the time-consistent solution to the cartel-fringe model of exhaustible resource extraction when the cartel acts as a von Stackelberg leader and renewable substitutes exist. For this feedback von Stackelberg equilibrium (FBSE), we show for each combination of stocks which equilibrium sequence will prevail. The equilibrium outcomes for the FBSE differ significantly: it features either an initial phase of simultaneous supply by the cartel and fringe or an initial phase where the cartel is the sole supplier on the market. We furthermore compare the FBSE with the Nash Cournot and the open-loop von Stackelberg equilibria.

Keywords: cartel-fringe; dynamic game; time-consistency; von Stackelberg equilibrium (search for similar items in EconPapers)
JEL-codes: Q01 Q30 Q38 Q42 (search for similar items in EconPapers)
Date: 2026
New Economics Papers: this item is included in nep-com and nep-gth
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