A Structural Econometric Model of the Dynamic Game Between Petroleum Producers in the World Petroleum Market

• Brown Bag
• Environmental and Resource Economics Workshop

Date and Location

Friday, April 28, 2017, 12:10 PM - 1:00 PM
ARE Conference Room, 2102 Social Sciences and Humanities

Abstract

In this paper, we develop and estimate a structural econometric model of the dynamic game among petroleum-producing firms in the world petroleum market. Our model allows firms that are at least partially state-owned to have objectives other than profit maximization alone. We use the structural econometric model to analyze the effects of changes in OPEC policy, the privatization of state-owned oil companies, production quotas, a ban on mergers, and demand shocks on the petroleum industry. Our modeling outcomes can be used to help inform decision-making and policy design. The results of our research will be of interest to academics, policy-makers, entrepreneurs, and business practitioners, including oil companies, alike. This model will also help petroleum firms better respond to government policies, and will help policy-makers better design sustainable energy policies.