Template-Type: ReDIF-Article 1.0
Author-Name:  Rognvaldur Hannesson
Title:  Extracting Common Oil: Cooperation or Competition?
Classification-JEL: F0
Pages:  105-120
Volume:  Volume21
Issue:  Number 2
Year:  2000
Abstract:  This paper considers how likely it is that a given number of agents who share a homogeneous oil reservoir will exploit the reservoir for their common benefit. A game-theoretical model is used, examining whether one agent would profit from deviating from the cooperative strategy, given that the remaining agents would follow a subgame-perfect retaliation strategy. The paper also, examines the sensitivity of the cooperative solution to the number of agents, the, time it takes to discover a deviation, the value of production relative to, investment, and the discount rate. It isf ound that the cooperative solution is very sensitive to the number of agents; with more than three agents the cooperative solution becomes very unlikely.
Handle: RePEc:aen:journl:2000v21-02-a05
File-URL: http://www.iaee.org/en/publications/ejarticle.aspx?id=1340
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