The Quadratic Oil Extraction Oligopoly

Abstract

Each extractor has a distinct initial endowment of oil and a distinct quadratic extraction cost and faces a linear industry demand schedule. We observe in a discrete-time model with a finite number of periods that the open loop and closed loop solutions are the same if initial stocks are such that each competitor is extracting in every period in which her competitors are extracting.

Publication
Resource and Energy Economics, 30(8), 568-577.
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Michael Brolley
Assistant Professor of Finance