On monopoly power in extractive resource markets
type: Item
instance of: scholarly article
title: On monopoly power in extractive resource markets
zbMATH Open document ID: 0623.90011
DOI: 10.1016/0095-0696(87)90011-8
author: Robert S. Pindyck
published in: Journal of Environmental Economics and Management
publication date: 1987-01-01T00:00:00Z
review text: Potential monopoly power in extractive resource markets is reduced by the depletability of reserves. This paper examines the dependence of monopoly power on resource rent, and on uncertainty over future reserve levels. A model is developed that treats reserves as ''inventories'' that fluctuate stochastically over time as a result of exploration, development, and production activities. Solutions of the model illustrate how output and monopoly power vary with the elasticity of demand, rent as a fraction of price, and the variance of reserve fluctuations. It is shown that uncertainty over future reserves can speed up production and by reducing resource rent, restore part of the monopoly power otherwise lost because of depletion. Antitrust implications are discussed, with reference to several resources.
Mathematics Subject Classification ID: 91B76
Mathematics Subject Classification ID: 91B24
Mathematics Subject Classification ID: 91B62
zbMATH DE Number: 4012272
zbMATH Keywords: monopoly power
zbMATH Keywords: extractive resource markets
MaRDI profile type: Publication
full work available at URL: 0095-0696(87)90011-8
OpenAlex ID: W1976605254
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description: scientific article; zbMATH DE number 4012272