Nonrenewable resources, strategic behavior and the hotelling rule: An experiment

Arbeitspapier

This study uses the methods of experimental economics to investigate possible reasons for the lack of empirical support for the Hotelling rule for nonrenewable resources. We argue that as long as resource stocks are large enough, producers may choose to (partially) ignore the dynamic component of their production decision, shifting production to the present and focusing more on strategic behavior. We experimentally vary stock size in a nonrenewable resource duopoly setting and find that producers with large stocks indeed pay significantly less attention to variables related to dynamic optimization, and overproduce relative to the Hotelling rule.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: WZB Discussion Paper ; No. SP II 2014-203

Classification and Topics

• Classification: Wirtschaft ; Design of Experiments: General ; Nonrenewable Resources and Conservation: General ; Oligopoly and Other Imperfect Markets
• Subject: laboratory experiment ; nonrenewable resources ; Hotelling rule ; dynamic oligopoly

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): van Veldhuizen, Roel ; Sonnemans, Joep
• Event: Veröffentlichung
• (who): Wissenschaftszentrum Berlin für Sozialforschung (WZB)
• (where): Berlin
• (when): 2014

Further information

• Handle: http://hdl.handle.net/10419/96220
• Last update: 10.03.2025, 11:46 AM CET