We give a full characterization of the open-loop Nash equilibrium of a nonrenewable resource game between two types of firms differing in extraction costs. We show that (i) there almost always exists a phase where both types of firms supply simultaneously, (ii) when the high cost mines are exploited by a number of firms that goes to infinity the equilibrium approaches the cartel-versus-fringe equilibrium with the fringe firms acting as price takers, and (iii) the cheaper resource may not be exhausted first, a violation of the Herfindahl rule, that may be detrimental to social welfare. © 2009 Elsevier B.V. All rights reserved.
Benchekroun, H., Halsema, A. N., & Withagen, C. A. A. M. (2009). On nonrenewable resource oligopolies: the asymmetric case. Journal of Economic Dynamics and Control, 33(11), 1867-1879. https://doi.org/10.1016/j.jedc.2009.03.008