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Nonrenewable resources, strategic behavior and the hotelling rule: an experiment
[working paper]
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Wissenschaftszentrum Berlin für Sozialforschung gGmbH
Abstract This study uses the methods of experimental economics to investigate possible reasons for the lack of empirical support for the Hotelling rule for nonrenewable resources. We argue that as long as resource stocks are large enough, producers may choose to (partially) ignore the dynamic component of th... view more
This study uses the methods of experimental economics to investigate possible reasons for the lack of empirical support for the Hotelling rule for nonrenewable resources. We argue that as long as resource stocks are large enough, producers may choose to (partially) ignore the dynamic component of their production decision, shifting production to the present and focusing more on strategic behavior. We experimentally vary stock size in a nonrenewable resource duopoly setting and find that producers with large stocks indeed pay significantly less attention to variables related to dynamic optimization, and overproduce relative to the Hotelling rule. (author's abstract)... view less
Keywords
behavior; resources; producer; laboratory experiment
Classification
Social Psychology
Ecology, Environment
Economic Policy
Free Keywords
Hotelling-Regel
Document language
English
Publication Year
2014
City
Berlin
Page/Pages
34 p.
Series
Discussion Papers / Wissenschaftszentrum Berlin für Sozialforschung, Forschungsschwerpunkt Markt und Entscheidung, Abteilung Verhalten auf Märkten, SP II 2014-203
Handle
https://hdl.handle.net/10419/96220
Status
Published Version; reviewed
Licence
Deposit Licence - No Redistribution, No Modifications