Optimal resource extraction and uncertainty about new technology

The optimal extraction policy of a known resource stock in an economy which has imperfect information about existence of a new technology is discussed. The optimal program is shown to depend on the remaining stock and the current information about existence of the new technology (which is updated every period). For two special forms of social welfare function, the optimal extraction policy is shown to be more conservative than in the situation of perfect information. The effects of improved information and greater availability of the known stock on the optimal extraction policy are also investigated.