Monopoly Extraction of an Exhaustible Resource with Two Markets

24 Pages Posted: 28 Mar 2004

See all articles by Carolyn Fischer

Carolyn Fischer

Resources for the Future

Ramanan Laxminarayan

The Center for Disease Dynamics, Economics & Policy (CDDEP); Center for Disease Dynamics, Economics & Policy; Princeton University

Abstract

Although much has been written about monopoly extraction of natural resources, the case of a resource being sold in two separate markets has escaped notice. We find that a monopolist facing two different iso-elastic demand schedules extracts more rapidly than the social planner, whether or not arbitrage prevents price discrimination between markets.

Suggested Citation

Fischer, Carolyn and Laxminarayan, Ramanan, Monopoly Extraction of an Exhaustible Resource with Two Markets. Canadian Journal of Economics, Vol. 37, No. 1, pp. 178-188, February 2004. Available at SSRN: https://ssrn.com/abstract=513410

Carolyn Fischer (Contact Author)

Resources for the Future ( email )

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Ramanan Laxminarayan

The Center for Disease Dynamics, Economics & Policy (CDDEP) ( email )

1616 P St NW
Suite 600
Washington DC, DC 20036
United States

Center for Disease Dynamics, Economics & Policy ( email )

1616 P Street, NW
Washington, DC 20036
United States

HOME PAGE: http://www.cddep.org

Princeton University ( email )

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Princeton, NJ 08544-0708
United States

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