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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.
Year of publication:
2006
Authors: Helal, Uddin ; Rahman, Shaikh Mahfuzur
Institutions: Department of Agricultural and Resource Economics, University of Maryland
Subject: Resource /Energy Economics and Policy
Extent:
application/pdf
Series:
Type of publication: Book / Working Paper
Notes:
The text is part of a series Department of Agricultural and Resource Economics>Working Papers Number 28578
Source:
Persistent link: https://www.econbiz.de/10005797951
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