Intertemporal Consistency Issues in Depletable Resources

Larry Karp and David M Newbery

No 346, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: The current price of a depletable resource depends on future demands and supplies, which affect how rapidly the resource is exhausted. Plans for future levels of demand and supply can therefore affect the current price. If agents have market power and can commit to future plans, then such plans may be dynamically inconsistent, in that given an opportunity to revise those plans at some later date, they wish to deviate from the initial announcement. We survey cases in which such plans are dynamically inconsistent and discuss solution concepts such as Markov perfect equilibria, time consistent equilibria and feedback forms of open-loop equilibria. Different issues arise depending whether market power is on the supply side, or on the demand side.

Keywords: Exhaustible Resources; Imports; Natural Resources; Tariffs (search for similar items in EconPapers)
Date: 1989-11
References: Add references at CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=346 (application/pdf)

Related works:
Chapter: Intertemporal consistency issues in depletable resources (1993)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:346

Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... pers/dp.php?dpno=346

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().