260AResearchTopics - 9/7/2005 260AResearchTopics.doc 8:53...

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9/7/2005 260AResearchTopics.doc 8:53 AM 1 Economics 260A Natural Resource Economics Fall 2005 Questions and topics for research papers: 1. Why have oil prices jumped as they have over the past 2-3 years? Present evidence on the recent history of prices. Can the Hotelling model of nonrenewable resource exploitation, with variants that treat exploration, non- homogeneous extraction costs, monopoly vs. competition, etc. provide a framework for understanding this price increase? (You may answer this question using theory, econometrics, simulations or all three. Make sure you at least look at some crude oil price data for the last 20 years.) 2. What does the theoretical and empirical analysis conducted to date conclude about OPEC’s behavior? Does OPEC act as a perfect cartel (monopoly,) a competitive industry, a cartel that cheats, a dominant firm? Do you regard the evidence as conclusive? Can you think of other research strategies that might be tried in order to answer this basic question? 3. The Hotelling model of nonrenewable resource extraction makes a simple prediction about the behavior of nonrenewable resource prices: price minus marginal cost should rise at the rate of interest, with variations for imperfect vs. perfect competition, for the presence of stock effects on extraction costs, for
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260AResearchTopics - 9/7/2005 260AResearchTopics.doc 8:53...

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