Existence of equilibria in exhaustible resource markets with economies of scale and inventories

Autor: Lucas Bretschger, Antoine Bommier, François Le Grand
Přispěvatelé: emlyon business school
Rok vydání: 2020
Předmět:
Rohstoffwirtschaft
Economics
Resource storage
jel:D41
Exhaustible resources
nonconvex extraction cost
equilibrium existence
resource storage
jel:C62
D92
Resource (project management)
Rohstoffpreis
Nonconvex extraction cost
0502 economics and business
Econometrics
ddc:330
050207 economics
Erschöpfbare Ressourcen
Non-renewable resource
Consumption (economics)
Q30
jel:D92
Rohstoffvorkommen
05 social sciences
Equilibrium existence
Non-convex extraction cost
Skalenertrag
Allgemeines Gleichgewicht
[SHS.ECO]Humanities and Social Sciences/Economics and Finance
Natural resource
Economies of scale
C62
Kosten
Path (graph theory)
jel:Q30
[SHS.GESTION]Humanities and Social Sciences/Business administration
050202 agricultural economics & policy
Constant (mathematics)
D41
Theorie
Exhaustible resources
nonconvex extraction cost
equilibrium existence
resource storage
Zdroj: Economic Theory
Economic Theory, 2017, 687-721 p
Economics Working Paper Series, 14/203
ISSN: 0938-2259
Popis: The paper proves the existence of equilibrium in nonrenewable resource markets when extraction costs are non-convex and resource storage is possible. Inventories flatten the consumption path and eliminate price jumps at the end of the extraction period. Market equilibrium becomes then possible, contradicting previous claims from Eswaran, Lewis and Heaps (1983). We distinguish between two types of solutions, one with immediate and one with delayed build-up of inventories. For both cases we do not only characterize potential optimal paths but also show that equilibria actually exist under fairly general conditions. It is found that optimum resource extraction involves increasing quantities over a period of time. What is generally interpreted as an indicator of increasing resource abundance is thus perfectly compatible with constant resource stocks.
Economics Working Paper Series, 14/203
Databáze: OpenAIRE
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