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A dynamic model of resource extraction and intensity of competition

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  • Tim Pegna

Abstract

This paper represents a significant extension of the traditional Cournot extraction game, by introducing the linear supply function strategy space in a novel, dynamic way. A variety of asymmetric cases are considered, including the new firm‐specific competitive strategies. The results highlight the importance of competition in accelerating the supply of critical minerals, which is vital to mitigate climate change, but also present a new sustainability challenge.

Suggested Citation

  • Tim Pegna, 2024. "A dynamic model of resource extraction and intensity of competition," Australian Economic Papers, Wiley Blackwell, vol. 63(S1), pages 33-46, May.
    • Handle: RePEc:bla:ausecp:v:63:y:2024:i:s1:p:33-46
    DOI: 10.1111/1467-8454.12346
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    References listed on IDEAS

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    1. Loury, Glenn C, 1986. "A Theory of 'Oil'igopoly: Cournot Equilibrium in Exhaustible Resource Markets with Fixed Supplies," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 27(2), pages 285-301, June.
    2. Harold Hotelling, 1931. "The Economics of Exhaustible Resources," Journal of Political Economy, University of Chicago Press, vol. 39(2), pages 137-137.
    3. Menezes, Flavio M. & Quiggin, John, 2012. "More competitors or more competition? Market concentration and the intensity of competition," Economics Letters, Elsevier, vol. 117(3), pages 712-714.
    4. Flavio M. Menezes & John Quiggin, 2020. "The Strategic Industry Supply Curve," Journal of Industrial Economics, Wiley Blackwell, vol. 68(3), pages 523-555, September.
    5. Klemperer, Paul D & Meyer, Margaret A, 1989. "Supply Function Equilibria in Oligopoly under Uncertainty," Econometrica, Econometric Society, vol. 57(6), pages 1243-1277, November.
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