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CARTEL STABILITY IN AN EXHAUSTIBLE RESOURCE MODEL
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UNSPECIFIED (1992) CARTEL STABILITY IN AN EXHAUSTIBLE RESOURCE MODEL. ECONOMICA, 59 (235). pp. 279-293. ISSN 0013-0427.
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Abstract
A simple oligopolistic common-pool exhaustible resource game is considered. By analysing punishment strategies, including optimal punishments, it is possible to determine which cartel agreements are implementable in a non-cooperative play of the game. Joint-profit-maximizing allocations are sustainable for sufficiently low discounting, but in general it is shown that no folk theorem exists for this model. In particular, for sufficiently high elasticities of demand, it is shown that optimal punishments are not sufficiently severe to enforce most stationary symmetric extraction paths, thus confirming the hypothesis that sufficient market power is needed for a cartel to be stable.
| Item Type: | Journal Article | ||||
|---|---|---|---|---|---|
| Subjects: | H Social Sciences > HC Economic History and Conditions | ||||
| Journal or Publication Title: | ECONOMICA | ||||
| Publisher: | ECONOMICA PUBL OFFICE | ||||
| ISSN: | 0013-0427 | ||||
| Official Date: | August 1992 | ||||
| Dates: |
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| Volume: | 59 | ||||
| Number: | 235 | ||||
| Number of Pages: | 15 | ||||
| Page Range: | pp. 279-293 | ||||
| Publication Status: | Published |
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