Product quality differentiation in a renewable resource oligopoly

Luca Colombo, Paola Labrecciosa

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The typical assumption in the literature on oligopoly exploitation of natural resources is that all units of extracted resource have the same commercial value. We depart from this assumption by allowing a constant share θ of the available resource stock to be associated with higher commercial value, thus introducing product quality differentiation. We interpret θ as a measure of resource quality and study the impact of an increase in θ on resource exploitation and social welfare. The main finding of our analysis is that an increase in resource quality can be welfare-reducing.

Original languageEnglish
Article number102583
Number of pages15
JournalJournal of Environmental Economics and Management
Publication statusPublished - Jan 2022


  • Differential games
  • Product quality
  • Productive asset oligopoly
  • Renewable resources
  • Social welfare

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