Affiliation:
1. T.C Ticaret Bakanlığı
2. TARSUS ÜNİVERSİTESİ, UYGULAMALI BİLİMLER FAKÜLTESİ, ULUSLARARASI TİCARET VE LOJİSTİK BÖLÜMÜ
Abstract
The assumption that the players in the international crude oil market are OPEC (Organization of Petroleum Exporting Countries) member countries and non-OPEC oil producing countries is common. That the players enter into a competitive tendency by using various strategy sets such as production level and price to maximize profit and / or controlling the oil markets reveals that the market in question can be analyzed with game theory models. The aim of this study is to analyze the competitive oil production amounts of OPEC and non-OPEC countries on the basis of game theory. For this purpose, the production amounts and crude oil price series of these players covering the period 1972-2019 were used. The coefficients of production functions that show the existence of competition in oil markets are estimated by the Fully Modified Ordinary Least Square (FMOLS) method. Cournot-Nash and Stackelberg equilibrium solutions are calculated based on the obtained models. According to the Cournot-Nash equilibrium, at the Stackelberg equilibrium, it was observed that the production level of the leader player increased and the production level of the follower player decreased. The findings are in line with studies in which Cournot-Nash equilibrium outputs are higher than Stackelberg equilibrium outputs. It is suggested that the players stay in the Cournot-Nash equilibrium in order to reach the optimal level of production through production quantity and price strategies.
Publisher
Mehmet Akif Ersoy Universitesi Iktisadi ve Idari Bilimler Fakultesi Dergisi
Subject
Organic Chemistry,Biochemistry
Reference63 articles.
1. Adelman, M. A. (1982). OPEC as a Cartel in J. M. Griffin and D.J. Teece, OPEC Behavior and World Oil Prices, London: George Allen and Unwin: 37-63.
2. Alhajji, A. & Huettner, D. (2000) “OPEC and World Crude Oil Markets From 1973 to 1994: Cartel, Oligopoly, or Competitive”, Energy Journal, 21(3): 31-60.
3. Almoguera, P. A. & Douglas, C. C., & Herrera, A. M. (2011), “Testing for the cartel in OPEC: non-cooperative collusion or just non-cooperative?” Oxford Review of Economic Policy, 27(1), 144-168.
4. Aperjis, D. (1982). The Oil Market in the 1980s, OPEC Oil Policy and Economic Development. Cambridge, MA: Ballinger Publishing Company.
5. Becker, R. & Enders, W., & Lee, J. (2006) “A Stationarity Test in The Presence of an Unknown Number of Smooth Breaks”, Journal of Time Series Analysis 27, 381–409.