The international petroleum market : some behavioral options
Name
MIT-EL-75-017WP-03830055.pdf
Size
9.85 MB
Format
Adobe PDF
Checksum (MD5)
3cc4c941f00b6cc45b88fc66ed3e3fca
Author(s)
Eckbo, Paul Leo
Date Issued
1975
Publisher
MIT Energy Lab
Series/Report no.
MIT-EL
75-017WP
Abstract
This thesis describes a behavioral model of the international
petroleum market and presents the results from it. The purpose of this
study is to develop a framework for analysis of the implications of the
likely degree of non-competitive behavior to be observed in the international petroleum market. The focus of the model is on the market
strategies that may be pursued by the world's oil exporters on a joint
or an individual basis. The structure of the model is designed to combine features of formal modelling and of informal "story-telling" in a
consistent framework. Such a structure requires a simulation type model.
The "stories" that are being told are constructed from cartel theory,
from the empirical evidence on previous commodity cartels, and from the
special characteristics of the individual oil exporters. The model
described is evolutionary in the sense that each exporter is assumed to
behave according to a set of decision rules which may reflect a competitive market structure, a monopolistic market structure, or any combination of the two. The change of the decision rules being applied provides
for the evolution of the market price. An attempt has been made to
combine the merits of formal competitive and monopoly models with those
of the informal "story-telling" approach. The price- and quantity-paths
consistent with the various "stories" over the period from 1974 to 1990
are reported.
Description
Originally presented as the author's thesis, (Ph.D.) in the M.I.T. Alfred P. Sloan School of Management
Subjects
Petroleum industry and trade
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