The order of extraction of resources with various extraction costs in the presence of uncertainty in future demand

The paper proposes a dynamic stochastic general equilibrium model with two exhaustible energy sources (resources) of low (oil) and high (coal) production costs. At the same time, the future demand for these resources is stochastic, which is realized in the model due to a stochastic improvement in the technology for the production of alternative energy sources. On the basis of numerical simulation analysis, we show that if in deterministic and stochastic representative agent problems the sequential extraction of natural resources is optimal when the resource with low extraction costs is extracted first then in a market equilibrium model with several economic agents heterogeneous in terms of ownership of a natural resource and not sharing risks, resources with high and low extraction costs are simultaneously traded on the market.