Scarcity, Efficiency and Disequilibrium in Resource Markets

Possible interpretations of the concept of scarcity in extractive resource markets are presented and then related to traditional economic ideas of efficient patterns of resource use. Sources of inefficiency in resource markets are then considered, with the main emphasis being on disequilibrium. Various simple models of disequilibrium suggest that resource markets are more stable if traders’ expectations are based on quantity rather than price information, so that the provision of such information increases efficiency.