When additional resource stocks reduce welfare
Hassan Benchekroun (),
Alex Halsema and
Journal of Environmental Economics and Management, 2010, vol. 59, issue 1, 109-114
In the dominant firm model, we show that an increase of the fringe's reserves of a nonrenewable resource may lead to a decrease in aggregate discounted social welfare. This happens when the difference between the fringe's extraction cost and the dominant firm's is positive and large enough. We also show that welfare might decrease if the fringe's marginal extraction cost decreases.
Keywords: Nonrenewable; resources; Dominant; firm; versus; fringe; Nash; equilibrium (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeeman:v:59:y:2010:i:1:p:109-114
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