Modeling Depletion in a Mineral Industry: The Case of Coal

Zimmerman, Martin B.

doi:10.2307/3003486

Cited by 38 publications

(11 citation statements)

References 2 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Hence, we use nonincreasing extraction costs in Eqn (3), which signifies increasing unit costs as the stock of the resource constantly decreases (cf. Gilbert, 1978;Zimmerman, 1977).…”

Section: General Formulation Of the Problemmentioning

confidence: 99%

“…This kind of marginal cost function is especially justified, since we are dealing with a nonrenewable resource the extraction of which becomes more expensive as the resource stock decreases. Gilbert (1978) uses oil as an example of such a resource and Zimmerman (1977) demonstrates its use for coal reserves. As an example, we use C , , = 3200, C , , = 0.002 in the numerical computations and the results are shown in panel A6 of Fig.…”

Section: Assumptions 6 (A6): Nonincreasing Unit Production-cost Functmentioning

confidence: 99%

See 1 more Smart Citation

Investment and pricing strategies of competing firms: A computational approach

Kivijärvi¹,

Soismaa²

1992

Manage Decis Econ

View full text Add to dashboard Cite

We analyze the classical investment and pricing problem of a dominant firm faced with competition from substitute industries or marginal firms in the same field. The firm owns a finite level of a resource (e.g. the stock of an exhaustible one), the consumption of which is to be divided optimally over a finite planning horizon. The competitors' measures affect the demand for the resource towards the dominating firm. Rising crude oil prices and investments in forms of alternative energy are representative examples of the strategic questions which involve competitive and contradictory interests among firms within an industry. The investment and pricing problem can be solved analytically only with strong, simplifying assumptions. To make the analysis simpler and to relax these restrictions, we combine a series of numerical tools, computerize them, and build up a user‐oriented, computerized decision aid, which we call a ‘computerized approach’. We solve the problem under different sets of theoretical assumptions. This chosen incremental theory building allows us to study the theoretical sensitivity of the original problem.

show abstract

“…Hence, we use nonincreasing extraction costs in Eqn (3), which signifies increasing unit costs as the stock of the resource constantly decreases (cf. Gilbert, 1978;Zimmerman, 1977).…”

Section: General Formulation Of the Problemmentioning

confidence: 99%

Section: Assumptions 6 (A6): Nonincreasing Unit Production-cost Functmentioning

confidence: 99%

Investment and pricing strategies of competing firms: A computational approach

Kivijärvi¹,

Soismaa²

1992

Manage Decis Econ

View full text Add to dashboard Cite

show abstract

“…In either event, average costs would be U-shaped. The empirical relevance of scale economies has been well-documented for a variety of resources [10,22,30].…”

Section: Introductionmentioning

confidence: 99%

On equilibrium in resource markets with scale economies and stochastic prices

Mason

2012

Journal of Environmental Economics and Management

View full text Add to dashboard Cite

a b s t r a c tIn this paper, I show the existence and the characteristics of equilibrium in a nonrenewable resource market where extraction costs are non-convex and market price is subject to stochastic shocks, an empirically relevant setting. In my model firms may be motivated to hold inventories to facilitate production smoothing, which allows them to continue producing at a smooth pace at any instant when extraction ceases, e.g. when reserves are exhausted. This aspect of the model then supports a competitive equilibrium in the presence of non-convex costs. Casual empirical evidence is provided that supports the central features of my model for a variety of non-renewable resources, lending credence to the explanation for equilibrium I propose.

show abstract

“…In the models to be discussed below this is not done, so this possibility is not incorporated here. For further details on the specification of GQ see Heal (1976), Solow and Wan (1977) and Zimmerman (1977).…”

Section: Sq(t) Playing a Role In The Exploitation Technology Gr Indicmentioning

confidence: 99%

Economic Theory and International Trade in Natural Exhaustible Resources

Withagen

1985

Lecture Notes in Economics and Mathematical Systems

View full text Add to dashboard Cite

Modeling Depletion in a Mineral Industry: The Case of Coal

Cited by 38 publications

References 2 publications

Investment and pricing strategies of competing firms: A computational approach

Investment and pricing strategies of competing firms: A computational approach

On equilibrium in resource markets with scale economies and stochastic prices

Economic Theory and International Trade in Natural Exhaustible Resources

Contact Info

Product

Resources

About