Feedback equilibria in a dynamic renewable resource oligopoly: Pre-emption,voracity and exhaustion |
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| Institution: | 1. Department of Economics, University of Bologna, Strada Maggiore 45, 40125 Bologna, Italy;2. ENCORE, University of Amsterdam, The Netherlands;3. Barcelona Institute of Economics (IEB), Spain;4. RCEA, Rimini, Italy;1. Paris School of Economics, 48 Bd Jourdan, 75014 Paris, France;2. Department of Economics, University of Pennsylvania, 3718 Locust Walk, Philadelphia, PA 19104-6207, United States;1. School of Commerce, UniSA Business School, University of South Australia, Australia;2. Finance Discipline Group, Business School, University of Technology, Sydney, Australia;1. Koç University, Department of Economics, Rumeli Feneri Yolu, Sariyer 34450, Istanbul, Turkey;2. Boston College, 140 Commonwealth Ave., Chestnut Hill, MA 02467, USA |
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| Abstract: | We revisit a recent literature on productive asset exploitation describing a differential oligopoly game of resource extraction under static, linear feedback and nonlinear feedback strategies, where we explicitly allow for the possibility of resource exhaustion. We show that (i) feedback rules entail resource exhaustion for a finite number of firms; and (ii) feedback strategies are more aggressive than static ones as long as the resource stock is large enough, in accordance with the acquired view based on the traditional pre-emption argument associated with feedback information. |
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| Keywords: | Dynamic oligopoly Renewable resources Feedback strategies |
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