This note provides a simple characterization of the optimal extraction of a non-renewable resource. The proposed formula determines the solution in its feedback form. It is shown to hold for a large class of models, as long as the utility is stock-independent.

We propose a model to reconcile the theory of inter-temporal non-renewable resource depletion with well-known stylized facts concerning the exploitation of exhaustible resources such as oil. Our approach introduces geological constraints into a Hotelling type extraction–exploration model. We...

We propose a model to reconcile the theory of inter-temporal non-renewable resource depletion with well-known stylized facts concerning the exploitation of exhaustible resources such as oil. Our approach introduces geological constraints into a Hotelling type extraction-exploration model. We...

Structural uncertainty arises when key features of the behavior of a system are not well understood. Observational uncertainty arises when key variables in a system are not directly observed. Both types of uncertainty lead to problems for standard dynamic optimization approaches. The replacement...

In this paper, we state sufficiency, necessity, convergence, existence and uniqueness results for infinite horizon optimal control problems with unbounded payoffs in which the assumptions are very weak and there are no topological assumptions about the model components. We also state a sequence...

Abstract We analyze a dynamic game between a buyer and a seller of an exhaustible resource. The seller chooses resource supply; the buyer can pay a fixed cost to invent a perfect substitute for the resource at any time. In closed-loop equilibrium, the buyer adopts the substitute when the...

Sustainable consumption is at the center of sustainable development that every country seems to want. One of the great challenges of this century must be to understand what drives the consumption and how we can reduce consumption through increased efficiency. However consumption is not simply...

In 1931 Harold Hotelling published his seminal contribution to the economic theory of exhaustible resources. His major insight states that the prices of exhaustible resources - more specifically the scarcity rent - will rise at the rate of interest, and consumption will decline over time. The...

In 1931 Harold Hotelling published his seminal contribution to the economic theory of exhaustible resources. His major insight states that the prices of exhaustible resources - more specifically the scarcity rent - will rise at the rate of interest, and consumption will decline over time. The...