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Alla Fridman
''Herfindahl rule under return flows''
( 2014, Vol. 34 No.3 )
The paper investigates the efficient extraction path in a partial equilibrium model with exhaustible resource, the usage of which is characterized by return flows, and a backstop to analyze the sequence of the resource use. It is shown that in the presence of users with different return flow coefficients Herfindahl rule can be violated as the low-cost and the high-cost resources could be used simultaneously.
Keywords: Exhaustible resource, return flows, optimal extraction, Herfindahl principle
JEL: Q3 - Nonrenewable Resources and Conservation: General
Q2 - Renewable Resources and Conservation: General
Manuscript Received : Mar 15 2014 Manuscript Accepted : Jul 10 2014

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