OPEC cartel: a revival of the dominant-firm theory

Journal Article · · J. Energy Dev.; (United States)

OSTI ID:7209487

Tourk, K A

The ''dominant-firm'' theory is applied to an economic model of price determination by the Organization of Petroleum Exporting Countries (OPEC) and indicates the cartel's pricing structure should hold for the next decade. OPEC's ability to control supplies conforms with ''dominant-firm'' theory compared to other international cartels in basic commodities. The tendency of most cartels is to fall apart when a few members break away and take advantage of high prices. Other pressures arise as consuming nations develop substitutes and because some producing nations are left out. OPEC's members, however, have varied rates of discount so that their relative amounts of reserves allows those with large reserves to become price leaders, while quantities are produced by quota to meet only the demand. (DCK)

• Research Organization: Illinois Inst. of Tech., Chicago
• OSTI ID: 7209487
• Journal Information: J. Energy Dev.; (United States), Journal Name: J. Energy Dev.; (United States) Vol. 2:2; ISSN JENDD
• Country of Publication: United States
• Language: English

Related Subjects

02 PETROLEUM
020300 -- Petroleum-- Drilling & Production
020700 -- Petroleum-- Economics
Industrial
& Business Aspects
29 ENERGY PLANNING, POLICY, AND ECONOMY
290200* -- Energy Planning & Policy-- Economics & Sociology
294002 -- Energy Planning & Policy-- Petroleum
AGREEMENTS
ALLOCATIONS
CHARGES
ECONOMIC IMPACT
ECONOMICS
EFFICIENCY
ENERGY MODELS
ENERGY SOURCES
ENERGY SUPPLIES
FOSSIL FUELS
FUELS
INTERNATIONAL AGREEMENTS
INTERNATIONAL ORGANIZATIONS
MARKET
OPEC
PETROLEUM
TRADE