Hostname: page-component-78c5997874-4rdpn Total loading time: 0 Render date: 2024-11-06T11:42:36.039Z Has data issue: false hasContentIssue false
  • English
  • Français

Cartel Extraction and Backstop Entry

Published online by Cambridge University Press:  17 August 2016

François Melese
Get access

Extract

Clearly there remain number of problems in the field of energy today. Of particular relevance is the role of substitutes and/or backstop technologies (see Nordhaus (1973)) in affecting the extraction decisions of monopolistic producers of (scarce) exhaustible resources.

Research and development is currently underway in most industrialized countries with the objective of producing alternatives to conventional energy inputs. Two principle motivating factors appear to be stimulating R & D in nations which import a significant share of their resource requirements for energy production. The first involves the inherent scarcity of these inputs which, unlike other capital assets, are nonrenewable. The second factor (which is augmented by the first) concerns the strategic or « essential » (see Dasgupta & Heal (1979)) nature of exhaustible resources in production. Such inputs often lie concentrated in the hands of a few potentially unstable regimes which for either political or strategic reasons makes continued dependance on these resources undesirable.

Type
Research Article
Information
Recherches Économiques de Louvain/ Louvain Economic Review , Volume 46 , Issue 3 , September 1980 , pp. 255 - 266
Copyright
Copyright © Université catholique de Louvain, Institut de recherches économiques et sociales 1980 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

*

IRES, University of Louvain.

I am indebted to Ph. Michel for his valuable suggestions and also to P. Dasgupta, L. Phlips, and R. Schmalensee for helpful comments on an earlier draft. The usual disclaimers apply. Research support from the FRFC is gratefully acknowledged.

References

Burness, S.H., (1976) « On the Taxation of Nonreplenishable Natural Resources », JEEM, Dec.Google Scholar
Dasgupta, P. and Heal, M.G. (1979), « Economie Theory and Exhaustible Resources, Cambridge, University Press.Google Scholar
Gaskins, D., (1971) « Dynamic Limit Pricing: Optimal Pricing under Threat of Entry », Journal of Economic Theory, 3.Google Scholar
Heal, G. (1976) « The Relationship Between Price and Extraction Cost for a Resource with a Backstop Technology », Bell Journal of Economics, 7.Google Scholar
Herfindahl, O.C., (1965) «Depletion and Economic Theory», in Gaffney, H., (ed.).Google Scholar
Hoel, H., (1978) « Resource Extraction, Substitute Production and Monopoly », Journal of Economic Theory, 19.Google Scholar
Hotelling, H., (1931), « The Economics of Exhaustible Resources », Journal of Political Economy, 39.Google Scholar
Kamien, M.I. and Schwartz, N.L., (1977) « A Note on Resource Usage and Market Structure », Journal of Economic Theory, 15.Google Scholar
Lewis, T.R., (1976) « Monopoly Exploitation of an Exhaustible Resource », JEEM, 3.Google Scholar
Nordhaus, W.D., (1973), « The Allocation of Energy Resources », Brookings Papers on Economic Activity, 3.Google Scholar
Scott, A., (1965), « The Theory of the Mine under Conditions of Certainty ». Paper presented to the annual meeting of the Council of Economics American Institute of Mining Metallurgical and Petroleum Engineers.Google Scholar
Stiglitz, J.E., (1976), « Monopoly and the Rate of Extraction of Exhaustible Resources », American Economic Review, vol. 66, n° 4.Google Scholar