Ore Money Ore Problems: A Resource Extraction Game
No 2021-10, Department of Economics Working Papers from Department of Economics, Williams College
Economic theories of the exploitation of depletable natural resources are built around a core model of intertemporal profit maximization that predicts that (barring unforeseen shocks) scarcity crises will not arise because forward looking resource owners will smooth extraction over time. The model that provides this result can seem opaque to students, but its intuition can be more easily grasped from experience. This paper shares a game that provides that experience. Participants play the role of mine owners who must decide how much to extract in each of two periods. In addition to showing how market pressures moderate intertemporal scarcity, the game also provides lessons about discounting, market power, information, and property rights. I provide all materials needed to play the game immediately or customize it.
Keywords: classroom game; natural resource extraction; Hotelling rule; active learning (search for similar items in EconPapers)
JEL-codes: A20 D25 D40 Q02 Q30 (search for similar items in EconPapers)
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Journal Article: Ore money ore problems: A resource extraction game (2023)
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