| 来源类型 | Working Paper |
| 规范类型 | 报告 |
| DOI | 10.3386/w21325 |
| 来源ID | Working Paper 21325 |
| Mining and Quasi-Option Value | |
| Christopher Costello; Charles D. Kolstad | |
| 发表日期 | 2015-07-13 |
| 出版年 | 2015 |
| 语种 | 英语 |
| 摘要 | We study the timing-of-extraction problem facing a decentralized mine owner when extraction entails environmental damage. As expected, when the environmental damage from mining is known, the socially optimal timing will depend on the magnitude of the damage relative to these costs in the rest of the world. But when environmental damage is uncertain, and these costs are revealed over time, a quasi-option value arises. We show that even if expected environmental costs are identical to those in the rest of the world, any uncertainty over these costs will cause the social planner to optimally delay mining until better information arrives. We show conditions under which it is optimal to postpone the mining decision indefinitely, and conditions when it is optimal to postpone only for a finite duration. The analysis leverages a crucial observation that distinguishes the non-renewable resource problem from the traditional quasi-option value framework. In the traditional framework, the presence of an irreversible investment and uncertainty can help nudge the decision maker to preserve an option, but it by no means implies the decision maker should always preserve the option. In contrast, for a non-renewable resource model, the arbitrage condition underpinning the Hotelling rule suggests that in the absence of uncertainty, the marginal mine owner is completely indifferent between mining immediately and at any point in the future. Thus, for our problem, any uncertainty will convince her to defer the mining decision. |
| 主题 | Environmental and Resource Economics ; Environment |
| URL | https://www.nber.org/papers/w21325 |
| 来源智库 | National Bureau of Economic Research (United States) |
| 引用统计 | |
| 资源类型 | 智库出版物 |
| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/578999 |
| 推荐引用方式 GB/T 7714 | Christopher Costello,Charles D. Kolstad. Mining and Quasi-Option Value. 2015. |
| 条目包含的文件 | 条目无相关文件。 | |||||
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