Economics of depletable resources: market forces and intertemporal bias

Journal Article · Tue Feb 01 04:00:00 EST 1977 · Rev. Econ. Stud.; (United States)

DOI:https://doi.org/10.2307/2296977· OSTI ID:7308441

Sweeney, J L

A theoretical model is developed of the extraction patterns of a non-renewable resource in order to examine the effects of various market forces caused by intertemporal allocations of known reserves. The extent of the original reserve limits the total quantity of the resource that can be extracted over time. The model is conducted with all parties cognizant of the quantities they control, the related costs of extraction, future price trends, and future government actions. A purely competitive market is found to support optimal allocations, while percentage depletion allowances are found to encourage over-extraction. The direction of bias as a result of price controls requires further data. Monopolies can lead to current under-use or over-use, which will determine future availability. Over-use can also result from insecure imported sources unless appropriate tariffs are imposed. A market imperfection function concept is used to derive these results. 16 references. (DCK)

• Research Organization: Federal Energy Administration, Washington, DC
• OSTI ID: 7308441
• Journal Information: Rev. Econ. Stud.; (United States), Journal Name: Rev. Econ. Stud.; (United States) Vol. 44:136; ISSN RVECB
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
290200 -- Energy Planning & Policy-- Economics & Sociology
290400* -- Energy Planning & Policy-- Energy Resources
292000 -- Energy Planning & Policy-- Supply
Demand & Forecasting
ALLOCATIONS
AVAILABILITY
CONSUMPTION RATES
DEMAND FACTORS
ECONOMIC IMPACT
ECONOMICS
ENERGY POLICY
EXPLOITATION
FORECASTING
GOVERNMENT POLICIES
MARKET
MATHEMATICAL MODELS
PRODUCTION
RESERVES
RESOURCE DEPLETION
RESOURCES
TAXES