On a Nonrenewable Resource Extraction Game Played by Asymmetric Firms

S. Kostyunin, A. Palestini () and E. Shevkoplyas
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S. Kostyunin: St. Petersburg State University
A. Palestini: Sapienza University of Rome
E. Shevkoplyas: St. Petersburg State University

Journal of Optimization Theory and Applications, 2014, vol. 163, issue 2, No 16, 660-673

Abstract: Abstract A differential game of extraction of a nonrenewable resource is taken into account, where two firms compete over time and their two terminal times of extraction are two different random variables. The winning firm will be the only one remaining in the game after the first one retires. We explicitly compute the Hamilton–Jacobi–Bellman equations of the model and solve them in an asymmetric game with logarithmic payoff structure and linear state dynamics.

Keywords: Nonrenewable resources; Random terminal time; Hamilton–Jacobi–Bellman equations (search for similar items in EconPapers)
Date: 2014
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DOI: 10.1007/s10957-013-0462-x

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