Horizontal agreements about the use of a natural resource

Geert Van Moer

MPRA Paper from University Library of Munich, Germany

Abstract: I analyze horizontal agreements about the use of a natural resource. I consider a Cournot duopoly where production depends on two inputs, a natural resource and a basket of other resources, according to a production technology with constant returns to scale. I compare three regimes. (1) The competitive benchmark is defined such that firms operate with the cost-minimizing input combination. (2) A joint absolute usage target lowers the absolute usage of the natural resource. It also lowers the usage in relative terms, per unit of production, except with a fixed-proportions production technology. (3) A joint relative usage target mimics the competitive benchmark.

Keywords: Horizontal Agreements; Natural Resources (search for similar items in EconPapers)
JEL-codes: L13 L41 Q01 Q38 (search for similar items in EconPapers)
Date: 2022-07-25
New Economics Papers: this item is included in nep-com, nep-ene, nep-env, nep-gth and nep-ind
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https://mpra.ub.uni-muenchen.de/122573/1/MPRA_paper_122573.pdf revised version (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:113878

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