Exploration for Nonrenewable Resources in a Dynamic Oligopoly: An Arrovian Result

Quaderni DSE Working Paper No. 859

19 Pages Posted: 7 Jan 2013

See all articles by Luca Lambertini

Luca Lambertini

University of Bologna - Department of Economics

Date Written: January 6, 2013

Abstract

I investigate two versions of a differential Cournot oligopoly game with nonrenewable resource exploitation, in which each firm may either exploit its own private pool or exploit a common pool jointly with the rivals. Firms use a deterministic technology to invest in exploration activities. In both models, there emerges that the individual exploration effort is higher when each firms has exclusive rights on a pool of its own, and depending on the assumptions on technology and demand, the aggregate exploration effort is either constant or increasing in the number of firms.

Keywords: differential games, natural resources, oligopoly

JEL Classification: C73, L13, Q30

Suggested Citation

Lambertini, Luca, Exploration for Nonrenewable Resources in a Dynamic Oligopoly: An Arrovian Result (January 6, 2013). Quaderni DSE Working Paper No. 859, Available at SSRN: https://ssrn.com/abstract=2197196 or http://dx.doi.org/10.2139/ssrn.2197196

Luca Lambertini (Contact Author)

University of Bologna - Department of Economics ( email )

Strada Maggiore 45
Bologna, 40125
Italy
+39 051 2092600 (Phone)
+39 051 2092664 (Fax)

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