OPTIMAL CONTRACTS FOR EXPLORATION WITH COST RECOVERY OF AN EXHAUSTIBLE NATURAL RESOURCE UNDER ASYMMETRIC INFORMATION

Shaikh Mahfuzur Rahman and Uddin Helal

No 20180, 2004 Annual meeting, August 1-4, Denver, CO from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: Exploration of an exhaustible resource with cost recovery under asymmetric information about cost is modeled and analyzed employing Principal-Agent theory. Allocation of lower than full information level of effort for the high-cost firms is found socially optimal. However, distortion is less in a two-stage process of exploration and extraction.

Keywords: Resource/Energy; Economics; and; Policy (search for similar items in EconPapers)
Pages: 17
Date: 2004
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea04:20180

DOI: 10.22004/ag.econ.20180

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