OPTIMAL CONTRACTS FOR EXPLORATION WITH COST RECOVERY OF AN EXHAUSTIBLE NATURAL RESOURCE UNDER ASYMMETRIC INFORMATION

Exploration of an exhaustible resource with cost recovery under asymmetric information about cost is modeled and analyzed employing Principal-Agent theory. Allocation of lower than full information level of effort for the high-cost firms is found socially optimal. However, distortion is less in a two-stage process of exploration and extraction.

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Year of publication:	2004
Authors:	Rahman, Shaikh Mahfuzur ; Helal, Uddin
Institutions:	Agricultural and Applied Economics Association - AAEA
Subject:	Resource /Energy Economics and Policy

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Extent:	application/pdf
Series:	2004 Annual meeting, August 1-4, Denver, CO.
Type of publication:	Book / Working Paper
Notes:	The text is part of a series 2004 Annual meeting, August 1-4, Denver, CO Number 20180
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005338265