Economics at your fingertips  

Optimal Resource Royalties with Unknown and Temporally Independent Extraction Cost Structures

Gérard Gaudet (), Pierre Lassere and Ngo Long
Authors registered in the RePEc Author Service: Pierre Lasserre

International Economic Review, 1995, vol. 36, issue 3, 715-49

Abstract: The authors study optimal nonrenewable resource royalty contracts when the extracting agent has private information on costs. This is a dynamic incentive problem in which the repeated relationship between the principal and the agent is constrained by initial reserves. Commitment is limited to one period and costs are intertemporally independent. Compared with full information extraction, information asymmetry shifts production to the future when the optimal contract requires exhaustion in two periods. When exhaustion by all types in two periods is not warranted, the effect on the terminal period is ambiguous and the output of even the lowest cost firm is always distorted. Copyright 1995 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

Date: 1995
References: Add references at CitEc
Citations: View citations in EconPapers (36) Track citations by RSS feed

Downloads: (external link) ... 0.CO%3B2-G&origin=bc full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See for details.

Related works:
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:

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0020-6598

Access Statistics for this article

International Economic Review is currently edited by Harold L. Cole

More articles in International Economic Review from Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association 160 McNeil Building, 3718 Locust Walk, Philadelphia, PA 19104-6297. Contact information at EDIRC.
Bibliographic data for series maintained by Wiley-Blackwell Digital Licensing () and ().

Page updated 2021-05-04
Handle: RePEc:ier:iecrev:v:36:y:1995:i:3:p:715-49