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Inscrutable OPEC? : behavioral tests of the cartel hypothesis
(MIT Center for Energy and Environmental Policy Research, 2003)
We show that standard statistical tests of OPEC behavior have very low power across a wide range of alternative hypotheses regarding market structure. Consequently, it is difficult, given the current availability and ...
World Oil: Market or Mayhem?
(2008)
The world oil market is regarded by many as a puzzle. Why are oil prices so volatile? What is OPEC and what does OPEC do? Where are oil prices headed in the long run? Is “peak oil” a genuine concern? Why did oil prices ...
Petroleum property valuation
(MIT Center for Energy and Environmental Policy Research, 2003)
This paper provides an overview of the principal economic methods employed to assess the value of petroleum properties. The difference between wellhead and in situ resource values is examined, as well as drawbacks inherent ...
Managing a portfolio of real options : sequential exploration of dependent prospects
(MIT Center for Energy and Environmental Policy Research, 2004)
We consider the impact of sequential investment and active management on the value of a portfolio of real options. The options are assumed to be interdependent, in that exercise of any one is assumed to produce, in addition ...
Diversification and the value of exploration portfolios
(MIT Center for Energy and Environmental Policy Research, 2005)
Conventional wisdom holds that dependence among geological prospects increases exploration risk. However, dependence also creates the option to truncate exploration if early results are discouraging. We show that the value ...
The option to try again : valuing a sequence of dependent trials
(MIT Center for Energy and Environmental Policy Research, 2004)
In various fields of economic endeavor, agents enjoy the option to ₃try, try again.₄ Failure in a particular pursuit often brings renewed effort to finally succeed. Many areas of R&D could be characterized in this fashion. ...
Rational plunging and the option value of sequential investment : the case of petroleum exploration
(MIT Center for Energy and Environmental Policy Research, 2006)
Any investor in assets that can be exploited sequentially faces a tradeoff between diversification and concentration. Loading a portfolio with correlated assets has the potential to inflate variance, but also creates ...
Distinguishable patterns of competition, collusion, and parallel action
(MIT Center for Energy and Environmental Policy Research, 2003)
Alternative market structures are distinguishable by the degree of parallel action exhibited by producers. We show that the correlation between output levels varies systematically with the degree of interdependence among ...
On The Portents of Peak Oil (And Other Indicators of Resource Scarcity)
(MIT Center for Energy and Environmental Policy Research, 2010-08)
Although economists have studied various indicators of resource scarcity (e.g., unit cost, resource rent, and market price), the phenomenon of “peaking” has largely been ignored due to its connection to non-economic theories ...