The Extractive Firm's Cost Spillover Tax For The Extended Hotelling Model

QED Working Paper Number
1169

We consider a competitive extraction industry comprising many small …firms, each with a slightly different quality of mineral holdings. With "rapidly" declining quality of holding per fi…rm we observe rent declining over an interval. We then take up the familiar planning model and isolate the tax required to make decentralized extraction by many distinct, competitive fi…rms replicate the planning solution.

Author(s)

Andrei Bazhanov
Zhen Song

JEL Codes

Keywords

exhaustible resources
resource rent
competitive extraction
corrective tax

Working Paper

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