Template-Type: ReDIF-Article 1.0
Author-Name:  James M. Griffin 
Author-Name:  Lawrence M. Vielhaber
Title:  OPEC Production: The Missing Link
Classification-JEL: F0
Pages:  115-132
Volume:  Volume 15
Issue:  Special Issue
Year:  1994
Abstract:  The future of oil depends critically on the production decisions of OPEC, which in turn depend on a variety of factors internal and external to the cartel. This paper uses a simulation of the world oil market to compute the, payoff to OPEC members of alternative price and production profiles, focusing on the incentives to cooperate as well as to cheat. A "tit-for-tat" strategy by the, Saudis significantly reduces the incentives to cheat, but the payoff for cheating is still positive for the smaller OPEC producers. Accordingly, prices well below the cartel's joint profit maximizing level seem most likely.
Handle: RePEc:aen:journl:1994si-a06
File-URL: http://www.iaee.org/en/publications/ejarticle.aspx?id=1017
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