The cutoff grade problem arises when technological infeasibility or high cost prevents an extractive firm from exploiting a heterogeneous deposit in strict sequence. The optimal cutoff grade varies directly with anticipated changes in present value price. A stochastic price path induces a higher...

Nonrenewable resource theory often is summarized by Hotelling's rule. This paper reviews theoretical extensions and empirical investigations of resource extraction models. Observed data are often inconsistent with the Hotelling rule, suggesting that other characteristics of nonrenewable resource...

Recent papers have examined sustainability in overlapping generations models with a nonrenewable resource or a renewable resource with a fixed rate of regeneration. When the regeneration of the resource depends upon the resource stock, a competitive economy can generate a variety of outcomes,...