Once-and-for-All Costs and Exhaustible Resource Markets

This paper analyzes the impact on exhaustible resource markets of setup or shut-down costs, a sparsely analyzed category of nonconvex production technologies. This paper proves that, even under idealized circumstances for competition, a competitive equilibrium will fail to exist in the presence of setup costs, for any utility and cost functions such that a planner would exploit exhaustible resource pools sequentially.


Issue Date:
1998
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/10623
Total Pages:
16
JEL Codes:
Q3; C62
Series Statement:
Discussion Paper 98-25




 Record created 2017-04-01, last modified 2017-04-04

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