Exploration for Nonrenewable Resources in a Dynamic Oligopoly: An Arrovian Result
Quaderni DSE Working Paper No. 859
19 Pages Posted: 7 Jan 2013
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: Suggested Citation