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Imperfect Competition in a Market of an Exhaustible Resource

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  • Fishelson, Gideon

Abstract

In this paper we study the paths of market prices and the extracted quantities of an exhaustible resource when the market ownership of the mines is of imperfect competition. The major part of the study is devoted to the Cournot—Nash case, with minor extensions to a Stackelberg duopoly and a cooperation between the two firms. The unique characteristics of the study is of perfect common property of the resource and perfect substitution of the rate of extraction and cummulative extraction in the costs of mining of each of the firms. If corner solutions are not a priori encountered, then the typical static characteristics are maintained also in the dynamic case.

Suggested Citation

  • Fishelson, Gideon, 1992. "Imperfect Competition in a Market of an Exhaustible Resource," Foerder Institute for Economic Research Working Papers 275563, Tel-Aviv University > Foerder Institute for Economic Research.
    • Handle: RePEc:ags:isfiwp:275563
    DOI: 10.22004/ag.econ.275563
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    References listed on IDEAS

    as
    1. Gilbert, Richard J. & Goldman, Steven M., 1978. "Potential competition and the monopoly price of an exhaustible resource," Journal of Economic Theory, Elsevier, vol. 17(2), pages 319-331, April.
    2. Libecap, Gary D & Wiggins, Steven N, 1984. "Contractual Responses to the Common Pool: Prorationing of Crude Oil Production," American Economic Review, American Economic Association, vol. 74(1), pages 87-98, March.
    3. repec:bla:econom:v:44:y:1977:i:176:p:409-14 is not listed on IDEAS
    4. Stiglitz, Joseph E, 1976. "Monopoly and the Rate of Extraction of Exhaustible Resources," American Economic Review, American Economic Association, vol. 66(4), pages 655-661, September.
    5. Partha Dasgupta & Richard J. Gilbert & Joseph E. Stiglitz, 1982. "Invention and Innovation Under Alternative Market Structures: The Case of Natural Resources," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 49(4), pages 567-582.
    6. Nancy Gallini & Tracy Lewis & Roger Ware, 1983. "Strategic Timing and Pricing of a Substitute in a Cartelized Resource Market," Canadian Journal of Economics, Canadian Economics Association, vol. 16(3), pages 429-446, August.
    7. David Levhari & Leonard J. Mirman, 1980. "The Great Fish War: An Example Using a Dynamic Cournot-Nash Solution," Bell Journal of Economics, The RAND Corporation, vol. 11(1), pages 322-334, Spring.
    8. Hoel, Michael, 1978. "Resource extraction, substitute production, and monopoly," Journal of Economic Theory, Elsevier, vol. 19(1), pages 28-37, October.
    9. A. M. Ulph & G. M. Folie, 1980. "Exhaustible Resources and Cartels: An Intertemporal Nash-Cournot Model," Canadian Journal of Economics, Canadian Economics Association, vol. 13(4), pages 645-658, November.
    10. Salant, Stephen W, 1976. "Exhaustible Resources and Industrial Structure: A Nash-Cournot Approach to the World Oil Market," Journal of Political Economy, University of Chicago Press, vol. 84(5), pages 1079-1093, October.
    Full references (including those not matched with items on IDEAS)

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