Lobbying over Exhaustible-Resource Extraction

Achim Voß and Mark Schopf

No 26, Working Papers Dissertations from Paderborn University, Faculty of Business Administration and Economics

Abstract: Consider a lobby group of exhaustible-resource suppliers, which bargains with the government over the extraction of an exhaustible resource and over contribution payments. We characterize the equilibrium extraction path and the development of contribution payments in time. The latter relates to the development of the conflict of interest between profit-maximization and welfare-maximization. Due to stock pollution damages, the government prefers a lower level of cumulative extraction than the lobby group in the long run. In the meantime, the resource suppliers’ aim to maximize profits implies that equilibrium extraction may be too slow to maximize welfare, while flow-pollution damages imply that it may be too fast.

Keywords: Environmental Policy; Exhaustible Resources; Political Economy; Lobbying; Nash Bargaining; Dynamic Programming (search for similar items in EconPapers)
JEL-codes: D72 Q31 Q38 Q58 (search for similar items in EconPapers)
Pages: 52
Date: 2016-05
New Economics Papers: this item is included in nep-ene, nep-env and nep-pol
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http://groups.uni-paderborn.de/wp-wiwi/RePEc/pdf/dispap/DP26.pdf (application/pdf)

Related works:
Journal Article: Lobbying over exhaustible-resource extraction (2021)
Working Paper: Lobbying over Exhaustible-Resource Extraction (2017)
Working Paper: Lobbying over Exhaustible-Resource Extraction (2015)
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