Optimal Pricing, Use and Exploration of Uncertain Natural Resource Stocks.

Abstract

Units of natural resources, to be called 'mines', are assumed distributed over the unexplored territory according to a Poisson process in space. At any moment, total reserves, R, and unexplored land, X, are given. Society can determine the rate of consumption, c, and the rate of exploration (space per unit time), x. Reserves, R, are drawn down by consumption and increased by discoveries made during exploration; X is decreased by exploration. At any moment, the payoff to society is a concave function of c less a linear function of x. Payoffs in the future are discounted back to the present at a constant rate.

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Document Details

Document Type
Technical Report
Publication Date
Dec 01, 1978
Accession Number
ADA065730

Entities

People

  • Kenneth J. Arrow
  • Sheldon Chang

Organizations

  • Harvard University

Tags

Communities of Interest

  • Air Platforms
  • Materials and Manufacturing Processes

DTIC Thesaurus Topics

  • Control Theory
  • Differential Equations
  • Dynamic Programming
  • Economic Systems
  • Economics
  • Equations
  • Extraction
  • Intervals
  • Mathematics
  • Military Research
  • Natural Resources
  • Partial Differential Equations
  • Probability
  • Probability Distributions
  • Random Variables
  • Rate Of Consumption
  • Uncertainty

Readers

  • Distributed Systems and Data Platform Development
  • Mathematical Modeling and Probability Theory.
  • Operations Research

Technology Areas

  • Space