Learning and Price Volatility in Duopoly Models of Resource Depletion Ellison, Martin; Scott, Andrew

User activity

Share to:
View the summary of this work
Ellison, Martin ; Scott, Andrew
Appears In
Journal of Monetary Economics
Models; Economics; Banking, finance and accounting industries
Academic; Trade
To link to full-text access for this article, visit this link: http://dx.doi.org/10.1016/j.jmoneco.2013.06.005 Byline: Martin Ellison, Andrew Scott Abstract: The combination of learning and depletion in non-renewable resource markets adds significant volatility to commodity prices. The market consists of a small number of suppliers who make depletion plans based on their perceptions of how sensitive price is to supply. Learning leads to changes in these perceptions and hence the revision of depletion plans, which can have a dramatic effect on market supply and price. Firstly, price trends upwards faster than the rate of time preference as the non-renewable resource approaches exhaustion. Secondly, there are frequent escape episodes in which price rises rapidly before gradually falling back. The striking volatility and nonstationarity in commodity prices that results has parallels in oil price data. Author Affiliation: (a) University of Oxford, United Kingdom (b) Bank of Finland, Finland (c) London Business School, United Kingdom (d) CEPR, United Kingdom Article History: Received 29 September 2011; Revised 20 June 2013; Accepted 27 June 2013
Work ID

2 editions of this work

Find a specific edition
Thumbnail [View as table] [View as grid] Title, Author, Edition Date Language Format Libraries

User activity

e.g. test cricket, Perth (WA), "Parkes, Henry"

Separate different tags with a comma. To include a comma in your tag, surround the tag with double quotes.

Be the first to add a tag for this work

Be the first to add this to a list

Comments and reviews

What are comments? Add a comment

No user comments or reviews for this work

Add a comment

Show comments and reviews from Amazon users