Technology Adoption in Nonrenewable Resource Management

Maria A. Cunha-e-Sá (), Ana Reis and Catarina Roseta-Palma
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Maria A. Cunha-e-Sá: Universidade Nova de Lisboa

No E2004/16, Economic Working Papers at Centro de Estudios Andaluces from Centro de Estudios Andaluces

Abstract: Nonrenewable resource scarcity has been a traditional concern when designing optimal growth models. Technological change has played an important role in those models, since its presence is assumed to mitigate the depletion effect on extraction paths over time. We formalize the general problem of a competitive nonrenewable resource extracting firm to analyze optimal extraction behavior and technology adoption when adoption is costly, both in a deterministic and a stochastic environment, when the firm either anticipates adoption or not. Based on a quadratic extraction cost function, our results do not support the traditional view according to which the firm will only incur in an adoption cost when the stock is depleted enough.

Keywords: nonrenewable resources; technology adoption; depletion effect; cost of adoption. (search for similar items in EconPapers)
JEL-codes: O33 Q55 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2004
New Economics Papers: this item is included in nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Technology adoption in nonrenewable resource management (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:cea:doctra:e2004_16

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