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| Author: | Karp, L. S. |
| Title: | Monopoly extraction of a durable non-renewable resource: failure of the Coase Conjecture |
| Journal: | Economica
1993 : FEB, 60:237, p. 1-11 |
| Index terms: | CONSUMER DURABLES NON-RENEWABLE RESOURCES MONOPOLY DEPRECIATION |
| Language: | eng |
| Abstract: | A perfect information, rational expectations Markov equilibrium is studied. The situation where a monopolist extracts a non-renewable resource which is converted to a durable good is considered. The concept of Coase Conjecture is introduced and investigated. Some important policy implications of the Coase Conjecture are described and analyzed. It is shown that even if short-run extraction costs are constant, the Coase Conjecture fails, provided that the depreciation rate of the durable good is positive. The analysis assumes the existence of equilibria. |
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