We consider the problem of efficiency and existence of a competitive equilibrium in exhaustible resource markets where extraction costs are nonconvex. Nonconvexity is shown to imply that (1) (efficient) extraction ceases to the left of the minimum efficient scale, i.e., where average costs...

If average costs in a nonrenewable resource industry are U-shaped, a competitive equilibrium may not be optimal and, indeed, may not exist. Although the differential equation that describes the change in the rate of extraction is the same for planner and firm, the boundary conditions obtained...

Abstract: We reconsider the problem of inefficiency and nonexistence of a competitive equilibrium in exhaustible resource markets where extraction costs are nonconvex. The existence of a backstop technology (which induces a flat portion of the industry demand curve) restores both existence and...

Official data from statistical agencies are not always ideal for cross-country comparisons because of differences in data sources and methodology. Analysts who engage in cross-country comparisons need to carefully choose among alternatives and sometimes adapt data especially for their purposes....

We analyze in this chapter decision-making when costs and benefits of an action are uncertain, that is, when future preferences are uncertain. We begin, in Section 2, with the classical analysis by Krutilla et al. (1972) of whether the expected consumer's surplus is a correct measure of the net...

Despite the existence of a large and growing literature on the potential impact of climatechange on agriculture, there still exists some disagreement about the magnitude and even thesign. Our own research suggests that the impact on U.S. agriculture is likely to be stronglynegative, based on a...

This paper develops a framework for the valuation and management of tropical forests that reflects their ecological and economic characteristics. The analysis demonstrates the importance of modeling the feasible use patterns and the information structure in tropical forest management decisions....