Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/86840
Authors: 
van Veldhuizen, Roel
Sonnemans, Joep
Year of Publication: 
2011
Series/Report no.: 
Tinbergen Institute Discussion Paper 11-014/1
Abstract: 
This study uses the methods of experimental economics to investigate possible causes for the failure of the Hotelling rule for nonrenewable resources. We argue that as long as resource stocks are high enough, producers may choose to (partially) ignore the dynamic component of their production decision, shifting production to the present and focusing more on strategic behavior. We experimentally vary stock size in a nonrenewable resource duopoly setting and find that producers with high stocks indeed pay significantly less attention to variables related to dynamic optimization, leading to a failure of the Hotelling rule.
Subjects: 
Experiments
Nonrenewable Resources
Dynamic Oligopoly
JEL: 
C90
Q31
Q41
L13
Document Type: 
Working Paper

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