In this work, we propose a model for the extraction of a nonrenewable resource in an economy where, initially, only one agent is enabled to perform extraction tasks. However, at certain nonpredictable (random) times, more companies receive the government's approval for extracting the country's resources. We provide a setup suitable for the use of standard dynamic programming results for both, the competitive and cooperative schemes; we develop the corresponding HJB equations, prove a verification theorem, and give an example. Our framework is inspired by the trends that oil industries are experiencing in countries like Mexico and Russia.

Original languageEnglish
Article number1640004
JournalInternational Game Theory Review
Volume18
Issue number2
DOIs
StatePublished - 1 Jun 2016

    Research areas

  • Conditional distribution, HJB equations, imputation distribution procedure, random start

    Scopus subject areas

  • Computer Science(all)
  • Business and International Management
  • Statistics, Probability and Uncertainty

ID: 36758293