Market structure and exhaustible resources: The case of natural gas and crude oil in California.

摘要

Using a dataset of natural gas and crude oil production in the state of California, evidence shows overextraction incentives among market participants that shared a common pool. Due to these incentives the supply of gas and crude oil extraction tends to become more inelastic as the number of firms in the pool increases. Using an instrumental variables estimation of the supply function, the results show that the common pool externality caused an average overproduction rate of 11% and 4% over the 1977--2001 period, in natural gas and crude oil, respectively. These figures imply 1 year and 4 years of additional production for natural gas and crude oil, respectively.