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On a Nonrenewable Resource Extraction Game Played by Asymmetric Firms

Author

Listed:
  • S. Kostyunin

    (St. Petersburg State University)

  • A. Palestini

    (Sapienza University of Rome)

  • E. Shevkoplyas

    (St. Petersburg State University)

Abstract

A differential game of extraction of a nonrenewable resource is taken into account, where two firms compete over time and their two terminal times of extraction are two different random variables. The winning firm will be the only one remaining in the game after the first one retires. We explicitly compute the Hamilton–Jacobi–Bellman equations of the model and solve them in an asymmetric game with logarithmic payoff structure and linear state dynamics.

Suggested Citation

  • S. Kostyunin & A. Palestini & E. Shevkoplyas, 2014. "On a Nonrenewable Resource Extraction Game Played by Asymmetric Firms," Journal of Optimization Theory and Applications, Springer, vol. 163(2), pages 660-673, November.
    • Handle: RePEc:spr:joptap:v:163:y:2014:i:2:d:10.1007_s10957-013-0462-x
    DOI: 10.1007/s10957-013-0462-x
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    References listed on IDEAS

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