EconStor >
Verein für Socialpolitik >
Jahrestagung des Vereins für Socialpolitik 2010: Ökonomie der Familie >

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10419/37146
  
Title:Global Oil Markets Revisited - Cartel or Stackelberg Market? PDF Logo
Authors:Holz, Franziska
Huppmann, Daniel
Issue Date:2010
Series/Report no.:Beiträge zur Jahrestagung des Vereins für Socialpolitik 2010: Ökonomie der Familie - Session: Oligopolistic Competition and Network Formation F9-V1
Abstract:This paper investigates the existence of market power and the sequentiality of games in the crude oil market. In particular, we examine whether Saudi Arabia acts as a Stackelberg leader or in a simultaneous-move framework, in a number of market power scenarios ranging from perfect competition to cartel. We develop a numerical simulation model that is formulated as a complementarity problem, allowing for the possibility of strategic interaction between the players. In contrast to other partial equilibrium models of natural resource markets, the model proposed in this paper explicitly takes into account the influence of price pools such as Brent and WTI where arbitrageurs exploit price differentials that are not justified by transport costs. Our results indicate that all suppliers exert market power while Saudi Arabia acts as Stackelberg leader. More specifically, we find that OPEC members do not act cooperatively, i.e. they do not maximise joint profits. Rather, they exhibit strategic non-cooperative behaviour, rejecting the notion that OPEC is a cartel.
Subjects:crude oil
market structure
cartel
simulation model
price indices
JEL:L13
L71
Q41
Document Type:Conference Paper
Appears in Collections:Jahrestagung des Vereins für Socialpolitik 2010: Ökonomie der Familie

Files in This Item:
File Description SizeFormat
VfS_2010_pid_303.pdf127.9 kBAdobe PDF
No. of Downloads: Counter Stats
Download bibliographical data as: BibTeX
Share on:http://hdl.handle.net/10419/37146

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.