hwaleader.blogg.se - Game theory hotelling model

They are currently on another downward trend. Once the economy recovered from the financial crisis, prices increased again. Pricing soared in the 2000s but dropped sharply in 2008 due to the Great Recession. It has raised a lot of concern not only among policymakers and economists but also business owners. The prices of nonrenewable resources have fluctuated dramatically over the past few years.

Factors that will affect the supply of the exhaustible resources, such as new discoveries and technology, are non-existent.

The theory assumes that events take place in an efficient market.

Hotelling’s theory is used by economists to predict the price of an exhaustible resource based on prevailing interest rates.