Optimal Resource Royalties with Unknown and Temporally Independent Extraction Cost Structures

Gaudet, Gérard; Lasserre, Pierre; Long, Ngo Van

doi:10.2307/2527368

Cited by 38 publications

(48 citation statements)

References 4 publications

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“…Karp and Livernois demonstrate the existence of a family of linear Markovian subsidy rule that would induce the monopolist to extract at the socially efficient rate; for similar results in a more general setting, see [6,8,11]. 9 The problem of extracting rent from a mining firm under asymmetric information is addressed by Gaudet et al [62]. The firm's cost is its private information.…”

Section: Optimal Taxation Of Resource-extracting Firmsmentioning

confidence: 98%

Dynamic Games in the Economics of Natural Resources: A Survey

Long

2010

Dyn Games Appl

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115

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Section: Optimal Taxation Of Resource-extracting Firmsmentioning

confidence: 98%

Dynamic Games in the Economics of Natural Resources: A Survey

Long

2010

Dyn Games Appl

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115

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“…In Gaudet, Lasserre and Long (1995), the principal-agent framework is used to analyze the inherently dynamic case of resource rent taxation. It is shown that the necessity of taking into account the information constraint will generally result in a modification of the standard Hotelling rule, that holds under symmetric information: it is now marginal profit appropriately corrected for the cost of the information constraint that must grow at the rate of interest.…”

Section: Asymmetry Of Informationmentioning

confidence: 99%

“…In Gaudet et al (1995) it is assumed that the principal, whether a government or a private owner, commits only to the current period's royalty rule. It is also assumed that there is zero temporal correlation of the marginal cost parameter subject to private information.…”

Section: Asymmetry Of Informationmentioning

confidence: 99%

The taxation of nonrenewable natural resources

Gaudet¹,

Lasserre²

2015

Handbook on the Economics of Natural Resources

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We provide an analytical overview of the distortionary effects of some common forms of taxes faced by the nonrenewable resources sector of the economy. In the category of taxes meant specifically to capture the resource rent, we look at a specific severance tax, an ad valorem severance tax, a profit tax and a "lump-sum" tax, with emphasis on their effects on the extraction decisions over time and on the initial reserves to be developed. In the category of taxes meant for all sectors of the economy, we look at the corporate income tax and its special provision for the resource sector in the form of a depletion allowance, with emphasis on the effects on the intra-industry resource extraction decisions and on the inter-industry allocation of investment.

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“…This can be implemented as alternative combinations of fixed fees and royalties. Osmundsen (1998) extends this to a two-period model, inspired also by Gaudet et al (1995). Lund (2002a), building on Gordon & MacKie-Mason (1995), instead has a model where taxes allow deductions for traditionally reported operating (or investment) costs.…”

Section: Transfer Pricing and Income Shiftingmentioning

confidence: 99%

Rent Taxation for Nonrenewable Resources

Lund

2009

Annu. Rev. Resour. Econ.

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents inThe literature on taxation of rents from nonrenewable resources uses different theoretical assumptions and methods and a variety of empirical observations to arrive at widely diverging conclusions. Many studies use models and methods which disregard uncertainty, investigating distortionary effects of different taxes on whether, when, and how to explore for, develop and operate resource deposits. Introducing uncertainty into the analysis opens a range of challenges, and leads to results which cast doubt upon the relevance of studies which neglect uncertainty. There are, however, several ways to analyze uncertainty, regarding companies' behavior, resource price processes, and diversification opportunities, all with different implications for taxation. Methods developed in financial economics since the 1980's are promising, but still not in widespread use. Some more specific topics covered in this review are optimal risk sharing between companies and governments, time consistency and fiscal stability, the relationship between taxes and discount rates, and transfer pricing. JEL classification numbers: B20, H20, H25, L71, O13, Q38

show abstract

Optimal Resource Royalties with Unknown and Temporally Independent Extraction Cost Structures

Cited by 38 publications

References 4 publications

Dynamic Games in the Economics of Natural Resources: A Survey

Dynamic Games in the Economics of Natural Resources: A Survey

The taxation of nonrenewable natural resources

Rent Taxation for Nonrenewable Resources

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