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http://hdl.handle.net/10419/53191
  
Title:Strategic resource dependence PDF Logo
Authors:Gerlagh, Reyer
Liski, Matti
Issue Date:2008
Series/Report no.:Nota di lavoro // Fondazione Eni Enrico Mattei: Sustainable development 72.2008
Abstract:We consider a situation where an exhaustible-resource seller faces demand from a buyer who has a perfect substitute but there is a time-to-build delay for the substitute. We that find in this simple framework the basic implications of the Hotelling model (1931) are reversed: over time the stock declines but supplies increase up to the point where the buyer decides to switch. Under such a threat of demand change, the supply does not reflect the true current resource scarcity but leads to increased future scarcity, felt during the transition to the substitute supplies. The analysis suggests a perspective on costs of oil dependence.
Subjects:Dynamic Bilateral Monopoly
Markov-Perfect Equilibrium
Depletable Resources
Energy
Alternative Fuels
Oil Dependence
JEL:D4
D9
O33
Q40
Document Type:Working Paper
Appears in Collections:FEEM Working Papers, Fondazione Eni Enrico Mattei

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