Strategic Considerations of Critical Mineral Depletion and Recycling Under Markovian Competition

Reference : Strategic Considerations of Critical Mineral Depletion and Recycling Under Markovian ...


	Document type :	E-prints/Working papers : First made available on ORBilu
	Discipline(s) :	Business & economic sciences : Quantitative methods in economics & management
	Focus Areas :	Sustainable Development
	To cite this reference:	http://hdl.handle.net/10993/55172

Title :	Strategic Considerations of Critical Mineral Depletion and Recycling Under Markovian Competition
Language :	English
Author, co-author :	Ruan, Weihua []
	Zou, Benteng [University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Department of Economics and Management (DEM) >]
Publication date :	May-2023
Number of pages :	36
Peer reviewed :	No
Keywords :	[en] critical minerals, recycling ; Hamilton-Jacobi- Bellman ; differential game,
Abstract :	[en] With the exhaustion of non-renewable resources and the increasing importance of critical materials for the transition to clean technology, recycling is being called into action. Fulfilling demand for critical minerals involves challenges such as supply chain disruption, resource depletion and positive minimum demand, however. Under Markovian competition between an exporting cartel and an importing country, we demonstrate that (i) if both virgin and recyclable resources are abundant, multiple subgame perfect Markovian Nash equilibria arise; (ii) if the exporting cartel can choose which Nash equilibrium to follow, when the cost of exploiting the non-renewable resource is sufficiently high, stopping the supply of virgin resource to the market is the Nash equilibrium; (iii) the consequence of this choice is that when the recyclable resource is exhausted, there is no Nash equilibrium anymore, although there remains virgin resource to exploit.
Permalink :	http://hdl.handle.net/10993/55172

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