Existence of Equilibria in Exhaustible Resource Markets with Economies of Scale and Inventories

Arbeitspapier

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.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Economics Working Paper Series ; No. 14/203

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Nonrenewable Resources and Conservation: General ; Existence and Stability Conditions of Equilibrium ; Market Structure, Pricing, and Design: Perfect Competition
• Thema: Exhaustible resources ; nonconvex extraction cost ; equilibrium existence ; resource storage ; Erschöpfbare Ressourcen ; Rohstoffvorkommen ; Rohstoffwirtschaft ; Kosten ; Rohstoffpreis ; Skalenertrag ; Allgemeines Gleichgewicht ; Theorie

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Bommier, Antoine ; Bretschger, Lucas ; Le Grand, François
• Ereignis: Veröffentlichung
• (wer): ETH Zurich, CER-ETH - Center of Economic Research
• (wo): Zurich
• (wann): 2014

Weitere Informationen

• DOI: doi:10.3929/ethz-a-010210631
• Handle: http://hdl.handle.net/10419/171646
• Letzte Aktualisierung: 10.03.2025, 11:45 MEZ