Intertemporal Depletion of Resource Sites by Spatially Distributed Users

Gaudet, Gérard; Moreaux, Michel; Salant, Stephen W.

doi:10.1257/aer.91.4.1149

Cited by 78 publications

(63 citation statements)

References 9 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…As our objective is to prove that general equilibrium may exist we restrict, without loss of generality, our attention to a price path that is continuous. 7 We consider the optimal extraction problem when storage is possible and start with a result on the different time periods.…”

Section: Extraction With Storage 41 the Setupmentioning

confidence: 99%

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

2014

View full text Add to dashboard Cite

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may AbstractThe 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.

show abstract

Section: Extraction With Storage 41 the Setupmentioning

confidence: 99%

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

2014

View full text Add to dashboard Cite

show abstract

“…[26] Kolstad [1994] and Gaudet et al [2001] incorporate space in the economic analysis of the optimal intertemporal depletion of exhaustible resources. In the work by Kolstad, space is considered as a continuum.…”

Section: Optimal Allocation Over Space and Timementioning

confidence: 99%

Optimal dynamic pricing of water in the presence of waterlogging and spatial heterogeneity of land

Xabadia

Goetz

Zilberman

2004

Water Resources Research

View full text Add to dashboard Cite

[1] Agricultural production is a major contributor to numerous environmental problems. Most of these problems have a dynamic aspect, and moreover, the magnitude of these environmental problems depends on the distribution of the characteristics of the land. Therefore policies designed to establish the social outcome need to be simultaneously targeted site specifically and time specifically. This paper integrates both aspects and presents a theoretical model that allows us to determine the socially optimal outcome over time and space. Moreover, the applicability of our approach, defined as optimal control in two stages, is demonstrated by reformulating the mathematical model such that it can be solved with standard mathematical software. For this purpose, we present an empirical study based on the cotton produced in the San Joaquin Valley in California and determine the socially optimal water price in the presence of waterlogging.

show abstract

“…In trying to apply this single-demand curve model during the last twenty years, several teams of authors have independently found a need to generalize it to account for users differing in their (1) location (Gaudet, Moreaux and Salant, 2001;Salant, 2000, 2002), (2) regulatory environment (Fischer and Salant, 2014;Hoel, 2011), or (3) resource needs (Chakravorty and Krulce, 1994;Chakravorty, Krulce and Roumasset, 2005;Im, Chakravorty and Roumasset, 2006). Each research team found that in the generalized model, users switch from one resource to another at different times and some users skip the use of some resources entirely; and yet, at the same time, a generalized Herfindahl result emerges.…”

Section: Introductionmentioning

confidence: 99%

“…The solution of the planning problem and its competitive analog displays what we have elsewhere called the "Generalized Herfindahl Principle" (Gaudet et al, 2001(Gaudet et al, , p. 1153. Any user j who is assigned source i early in the program and i later in the program must have 2 The resumption of usage of a source by one user after it has been abandoned by another user and has remained idle is illustrated in Figure 1 of Im et al (2006).…”

mentioning

confidence: 98%

The Hotelling Model with Multiple Demands

Salant

Gaudet

2014

SSRN Journal

View full text Add to dashboard Cite

The purpose of this chapter is to provide an elementary introduction to the nonrenewable resource model with multiple demand curves. The theoretical literature following Hotelling (1931) assumed that all energy needs are satisfied by one type of resource (e.g. "oil"), extractible at different per-unit costs. This formulation implicitly assumes that all users are the same distance from each resource pool, that all users are subject to the same regulations, and that motorist users can switch as easily from liquid fossil fuels to coal as electric utilities can. These assumptions imply, as Herfindahl (1967) showed, that in competitive equilibrium all users will exhaust a lower cost resource completely before beginning to extract a higher cost resource: simultaneous extraction of different grades of oil or of oil and coal should never occur. In trying to apply the single-demand curve model during the last twenty years, several teams of authors have independently found a need to generalize it to account for users differing in their (1) location, (2) regulatory environment, or (3) resource needs. Each research team found that Herfindahl's strong, unrealistic conclusion disappears in the generalized model; in its place, a weaker Herfindahl result emerges. Since each research team focussed on a different application, however, it has not always been clear that everyone has been describing the same generalized model. Our goal is to integrate the findings of these teams and to exposit the generalized model in a form which is easily accessible.

show abstract

Intertemporal Depletion of Resource Sites by Spatially Distributed Users

Cited by 78 publications

References 9 publications

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

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

Optimal dynamic pricing of water in the presence of waterlogging and spatial heterogeneity of land

The Hotelling Model with Multiple Demands

Contact Info

Product

Resources

About