EconPapers    
Economics at your fingertips  
 

On nonrenewable resource oligopolies: The asymmetric case

Hassan Benchekroun (), Alex Halsema and Cees Withagen

Journal of Economic Dynamics and Control, 2009, vol. 33, issue 11, 1867-1879

Abstract: We give a full characterization of the open-loop Nash equilibrium of a nonrenewable resource game between two types of firms differing in extraction costs. We show that (i) there almost always exists a phase where both types of firms supply simultaneously, (ii) when the high cost mines are exploited by a number of firms that goes to infinity the equilibrium approaches the cartel-versus-fringe equilibrium with the fringe firms acting as price takers, and (iii) the cheaper resource may not be exhausted first, a violation of the Herfindahl rule, that may be detrimental to social welfare.

Keywords: Nonrenewable; resources; Nash; equilibrium; Cartel; versus; fringe; Open; loop (search for similar items in EconPapers)
Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0165-1889(09)00111-0
Full text for ScienceDirect subscribers only

Related works:
Working Paper: On Nonrenewable Resource Oligopolies: The Asymmetric Case (2008) Downloads
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:eee:dyncon:v:33:y:2009:i:11:p:1867-1879

Access Statistics for this article

Journal of Economic Dynamics and Control is currently edited by J. Bullard, C. Chiarella, H. Dawid, C. H. Hommes, P. Klein and C. Otrok

More articles in Journal of Economic Dynamics and Control from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

 
Page updated 2019-05-28
Handle: RePEc:eee:dyncon:v:33:y:2009:i:11:p:1867-1879