Herfindahl rule under return flows

Alla Fridman ()
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Alla Fridman: National Research University Higher School of Economics (HSE)
Authors registered in the RePEc Author Service: Alla Friedman

Economics Bulletin, 2014, vol. 34, issue 3, 1456-1462

Abstract: The paper investigates the efficient extraction path in a partial equilibrium model with exhaustible resource, the usage of which is characterized by return flows, and a backstop to analyze the sequence of the resource use. It is shown that in the presence of users with different return flow coefficients Herfindahl rule can be violated as the low-cost and the high-cost resources could be used simultaneously.

Keywords: Exhaustible resource; return flows; optimal extraction; Herfindahl principle (search for similar items in EconPapers)
JEL-codes: Q2 Q3 (search for similar items in EconPapers)
Date: 2014-07-10
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