Working paper icon

Working paper

On equilibrium in resource markets with scale economies and stochastic prices

Abstract:

I consider a non-renewable resource market where extraction costs are non-convex and market price is subject to stochastic shocks. While competitive equilibrium cannot exist if costs are non-convex and demand is deterministic, equilibrium can be supported in the context of stochastic demand. The crucial distinction is that the noisy environment can create an incentive for firms to hold inventories. Inventories allow firms to continue producing at a smooth pace at any instant when extraction c...

Expand abstract
Publication status:
Published

Actions


Access Document


Files:

Authors


Publisher:
University of Oxford Publisher's website
Series:
OxCarre Papers
Publication date:
2011-11-17
Paper number:
73
Keywords:
Pubs id:
1143855
Local pid:
pubs:1143855
Deposit date:
2020-12-15

Terms of use


Views and Downloads






If you are the owner of this record, you can report an update to it here: Report update to this record

TO TOP