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Cartel and Oligopoly Pricing of Nonreplenishable Natural Resources

Lewis, Tracy R. and Schmalensee, Richard (1978) Cartel and Oligopoly Pricing of Nonreplenishable Natural Resources. Environmental Quality Laboratory, Open File Report, 78-7. California Institute of Technology , Pasadena, CA. (Unpublished) http://resolver.caltech.edu/CaltechAUTHORS:20121001-114257937

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Abstract

This essay is concerned with the implications of these structures in markets for nonrenewable natural resources. Following Hotelling (1931) and numerous subsequent authors, we assume that the total reserves of the resource in the hands of each producer cannot be increased and are reduced by production. Demand and cost conditions, including the relevant rate of interest, are constant over time. In such a world, producers must rationally consider price or output paths over time, so that both models outlined above become non-zero sum differential games. In what follows, we examine solutions to the games implied by various assumptions.


Item Type:Report or Paper (Technical Report)
Group:Environmental Quality Laboratory
Record Number:CaltechAUTHORS:20121001-114257937
Persistent URL:http://resolver.caltech.edu/CaltechAUTHORS:20121001-114257937
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:34593
Collection:CaltechEQL
Deposited By: George Porter
Deposited On:01 Oct 2012 20:11
Last Modified:27 Dec 2012 02:47

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