A Martingale Characterization of the Price of a Nonrenewable Resource with Decisions Involving Uncertainty, Journal of Economic Theory
We consider a general model of nonrenewable resource consumption and exploration decisions under uncertainty. The unceratinty may be about the time of exhaustion, new stock discovery or a producible substitute availability. We provide necessary and sufficient conditions for the resource price to rise at rate equal to, greater than or less than the discount rate.
Sudhakar D. Deshmukh, Stanley R. Pliska
Deshmukh, D. Sudhakar, and Stanley R. Pliska. 1985. A Martingale Characterization of the Price of a Nonrenewable Resource with Decisions Involving Uncertainty. Journal of Economic Theory. 35(2): 322-342.