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A Simple Characterization of the Optimal Extraction Policy of a Non-Renewable Resource When Extraction Cost is Stock-Independent

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  • Sébastien Rouillon

    (GREThA - Groupe de Recherche en Economie Théorique et Appliquée - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique)

Abstract

This note provides a simple characterization of the optimal extraction of a non-renewable resource. The proposed formula determines the solution in its feedback form. It is shown to hold for a large class of models, as long as the utility is stock-independent.
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Suggested Citation

  • Sébastien Rouillon, 2013. "A Simple Characterization of the Optimal Extraction Policy of a Non-Renewable Resource When Extraction Cost is Stock-Independent," Post-Print hal-01135672, HAL.
    • Handle: RePEc:hal:journl:hal-01135672
    as

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    1. Rincon-Zapatero, J. P., 2004. "Characterization of Markovian equilibria in a class of differential games," Journal of Economic Dynamics and Control, Elsevier, vol. 28(7), pages 1243-1266, April.
    2. Harold Hotelling, 1931. "The Economics of Exhaustible Resources," Journal of Political Economy, University of Chicago Press, vol. 39(2), pages 137-137.
    3. Devarajan, Shantayanan & Fisher, Anthony C, 1981. "Hotelling's "Economics of Exhaustible Resources": Fifty Years Later," Journal of Economic Literature, American Economic Association, vol. 19(1), pages 65-73, March.
    4. Partha Dasgupta & Geoffrey Heal, 1974. "The Optimal Depletion of Exhaustible Resources," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 41(5), pages 3-28.
    5. Peterson, Frederick M & Fisher, Anthony C, 1977. "The Exploitation of Extractive Resources: A Survey," Economic Journal, Royal Economic Society, vol. 87(348), pages 681-721, December.
    6. J. P. Rincón-Zapatero & J. Martínez & G. Martín-Herrán, 1998. "New Method to Characterize Subgame Perfect Nash Equilibria in Differential Games," Journal of Optimization Theory and Applications, Springer, vol. 96(2), pages 377-395, February.
    7. Jeffrey A. Krautkraemer, 1998. "Nonrenewable Resource Scarcity," Journal of Economic Literature, American Economic Association, vol. 36(4), pages 2065-2107, December.
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    More about this item

    Keywords

    extraction; non-renewable; ressource;
    All these keywords.

    JEL classification:

    • Q30 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - General
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis

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