Environmental and Resource Economics

, Volume 30, Issue 3, pp 243–257 | Cite as

Competition in Markets for Depletable Resources with Setup Costs



This paper analyzes the impact on exhaustible resource markets of setup costs, a sparsely analyzed category of nonconvex production technologies. This paper proves that, even under idealized circumstances for competition, a competitive equilibrium will fail to exist in the presence of setup costs, for any utility and cost functions such that a planner would exploit exhaustible resource pools sequentially.


competitive equilibrium natural resources non-convexities setup costs shutdown costs 


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Copyright information

© Springer 2005

Authors and Affiliations

  1. 1.Resources for the FutureWashington, DCUSA

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