Strategic Considerations of Critical Mineral Depletion and Recycling Under Markovian Competition

Weihua Ruan () and Benteng Zou
Additional contact information
Weihua Ruan: Purdue University Northwest, USA

DEM Discussion Paper Series from Department of Economics at the University of Luxembourg

Abstract: With the exhaustion of non-renewable resources and the increasing importance of criti- cal materials for the transition to clean technology, recycling is being called into action. Fulfilling demand for critical minerals involves challenges such as supply chain disruption, resource depletion and positive minimum demand, however. Under Markovian competi- tion between an exporting cartel and an importing country, we demonstrate that (i) if both virgin and recyclable resources are abundant, multiple subgame perfect Markovian Nash equilibria arise; (ii) if the exporting cartel can choose which Nash equilibrium to follow, when the cost of exploiting the non-renewable resource is sufficiently high, stopping the supply of virgin resource to the market is the Nash equilibrium; (iii) the consequence of this choice is that when the recyclable resource is exhausted, there is no Nash equilibrium anymore, although there remains virgin resource to exploit.

Keywords: critical minerals; recycling; import and export; differential game; Hamilton-Jacobi-Bellman. (search for similar items in EconPapers)
JEL-codes: C61 D4 L12 L72 Q34 (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-ene, nep-env and nep-gth
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10993/55172 (application/pdf)

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: https://EconPapers.repec.org/RePEc:luc:wpaper:23-04

Access Statistics for this paper

More papers in DEM Discussion Paper Series from Department of Economics at the University of Luxembourg Contact information at EDIRC.
Bibliographic data for series maintained by Marina Legrand ().