The Mutual Intertemporal Benefits from Depletable Resource Use

Abstract

For the two-period case, the author offers a graphical proof of the proposition that the dynamically efficient allocation of a depletable, nonrenewable resource allows higher net benefits to users in both time periods than any other allocation. Unlike the pedagogical technique of numerical illustration used heretofore, the result is more general and does not require numerical specification of the model's parameters.

Key Words:

• depletable resources
• dynamic efficiency
• opportunity cost
• A22
• Q30

Additional information

Notes on contributors

Clark Wiseman

Clark Wiseman (e-mail: [email protected]) is with the School of Business at Gonzaga University in Spokane, WA.