A Differential Game On The Extraction Of An Exhaustible Natural Resource Under The Restricted Cost

Since1931, after Hotelling’s research, exhaustible natural resource economy hasbeen a branch of the economy. The optimal exhaustible natural resource depletion hasbeen the core of the discipline.This article analyzes the effects of several important factors (e.g. extracting cost) tothe oligopoly extraction rate of an exhaustible natural resource. We assume that there areN firms extracting the resource of constant elasticity and a linear extracting cost function.We acquire the each firm’s feedback equilibrium strategy of this oligopoly market modelbased on differential game. And we get the conclusions that the extracting cost has acrucial effect to the entry and exit decisions, the extracting rate and the terminal point. Atlast, we get a brief comparison to some classic papers.With China’s rapid economic development, the urbanization process of thedevelopment of urban land resources scarcity is increasingly evidently. The urban landresource is an exhaustible one and the exploitation of urban land resource is also in linewith the assumptions of the proposed model provides an analyst. Then, this articledescribes the meaning of the land reserve system background, the operating mechanism,and the land market operation mechanism. Analyze the exploitation of urban landresource of China from the view of fixed cost, draw conclusions and confirmed by thedata on this basis, provide the relevant policy recommendations.