Hotelling definition
Examples of Hotelling in a sentence
In location differentiation models (Hotelling (1929), Salop (1979)), borrowers incur distance-related transportation costs visiting their bank branch.4 Banks price uniformly if they cannot observe borrower location or are prevented from charging different prices to different borrowers.
To calculate the net present value (NPV) of the revenues from the credits, a social time preference rate of 2.7% was used, based on a pure time preference rate of 1.5% (including catastrophic risk), an elasticity of marginal utility of consumption of 1 and 36 The 4% growth rate is based on Hotelling’s rule (Hotelling, 1931).
As in Hotelling, it is clear that there will be an eventual transition from the nonrenewable to the renewable resource.
In the next phase the ceiling is no longer relevant, so resource use is strictly Hotelling starting from the residual stock at timeτ~ .
Then as energy demand declines over time, abandon solar and revert back to a ''Hotelling'' world with coal as the primary source of energy, only to transition completely to solar energy when coal is exhausted.
These results provide a point of departure from the standard Hotelling notion of a switch from a cheap nonrenewable to a costly renewable resource.
As in standard Hotelling models, an expensive backstop such as solar energy can provide clean energy.
Of course, if abatement costs are zero, the ceiling itself is of no relevance and the entire extraction program will proceed according to Hotelling.
The Whitening transform functions in much the same way as the Hotelling transform, however, it incorporates the scaling step within the transform.
Alternatively when coal is abundant or mildly polluting, or solar energy is expensive, the supply of energy at the ceiling is provided only by coal, followed by a Hotelling phase when the ceiling is non-binding in which extraction declines until coal is exhausted and is replaced by the backstop resource.