Abstract
This paper is concerned with the stability of OPEC as a cartel, in particular the bargaining within OPEC over price and output shares for its member countries.
Although many of the questions concerning OPEC behavior are inherently game-theoretical, there have been few formal attempts to employ game theory. In this paper, the OPEC cartel is modeled as a game in partition function form.
Given the estimated partition function, we utilize various solution concepts, such as the set of imputations and the core, as modified for the partition function form, to examine questions about OPEC stability and the prospects for oil prices and output shares. We would hope to achieve a better understanding of the bargaining within OPEC over price and output shares and to predict the likely partition and rule-of-thumb strategy selected.
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© 1979 Springer-Verlag Berlin Heidelberg
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Gately, D. (1979). OPEC Pricing and Output Decisions A Partition Function Approach to OPEC Stability. In: Brams, S.J., Schotter, A., Schwödiauer, G. (eds) Applied Game Theory. Physica, Heidelberg. https://doi.org/10.1007/978-3-662-41501-6_19
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DOI: https://doi.org/10.1007/978-3-662-41501-6_19
Publisher Name: Physica, Heidelberg
Print ISBN: 978-3-7908-0208-5
Online ISBN: 978-3-662-41501-6
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