Technology adoption in nonrenewable resource management

Maria A. Cunha-e-Sá, Ana Balcão Reis and Catarina Roseta-Palma

Energy Economics, 2009, vol. 31, issue 2, 235-239

Abstract: Technological change has played an important role in models of nonrenewable resource management, since its presence mitigates the depletion effect on extraction costs over time. We formalize the problem of a competitive nonrenewable resource extracting firm faced with the possibility of technology adoption. Based on a quadratic extraction cost function, our results show that the expected net benefits from adoption increase both with the size of the resource stock and with prices. A boundary that separates the region where expected net benefits are positive from the one where they are negative is derived.

Date: 2009
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Working Paper: Technology Adoption in Nonrenewable Resource Management (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:31:y:2009:i:2:p:235-239

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