CEU eTD Collection nprilflleto h eurmnsfrtedge fMse of Master of degree the for requirements the of fulfilment partial In aeTertcMdln fthe of Modeling Theoretic Game h usa an rmSrtgcBehavior Strategic from Gains Russian The hsssbitdt eta uoenUniversity European Central to submitted Thesis ol i Market Oil World uevsr rfso nre Baniak Andrzej Professor Supervisor: oiaMdln Haita Corina-Madalina eateto Economics of Department uaet Hungary Budapest, 2007 by Arts CEU eTD Collection lasmr etro hnRsi hntelte ly strat plays latter the when Russia versi than price-taking better-off more the always with incr compared price as the that behavior show Russia’s with I of average addition, on In is case. supply strategic its the in for 1 resources, below some low, save very to are behavior able strategic the from gains price-taker the a as being between indifferent gai be Russian should the Russia from that models elas the such of of outcome combinations the different quantitatively for models the s solve fringe I and demand and oil global of elasticities price players the main use two I the for functions cost marginal frin construct and I demand oil global for forms behav functional two tiplicative these in profits Th Russian quanti the competitively. compare a behaving quantitatively in producers player fringe strategic the a with is OPEC, Russia OPEC version, and second producers the fringe the In with first together the price-taker In a t Russia. as of of model behavior oligopoly the static by differentiated stylized versions a employ I thesis this In Abstract i espl,ecpigRsi and Russia excepting supply, ge pl seoeosparameters, exogenous as upply ae ntesrtgcversion strategic the in eases rmtebs aaavailable. data best the from n utemr,OE is OPEC Furthermore, on. ewrdolmre ntwo in market oil world he iiis ial,Icompare I Finally, ticities. n eaigstrategically, behaving and oa iutos s mul- use I situations. ioral .Nvrhls,Rsi is Russia Nevertheless, %. eso usai regarded is Russia version egically. i fti hssi to is thesis this of aim e 000bresdylower barrels/day 50,000 spito iw show I view. of point ns ylaesi aewith game leadership ty saprilmonopolist. partial a is CEU eTD Collection eaFts,m cdmcWiigsprio,frcrflyraigand reading sinc carefully express for to text. supervisor, like Writing would Academic I my encouragement. Futasz, and Reka patience their for spec as bring well I thesis. valu this his of Varró for elaboration László Baniak, the Andrezej during guidance Dr. and supervisor, suggestions my for gratitude my express I ∗ † taeyAayt O,Hungary MOL, Analyst, Strategy Hungary MOL, Economist, Chief ∗ n ee io Vargha Simon Peter and Acknowledgments † o hi ep da n aeil rvdd as provided, materials and ideas help, their for ii orcigmy correcting r hnsto thanks ere a hnsto thanks ial beadvice, able CEU eTD Collection pedxB ueia results Numerical B. Appendix Problems Optimization A. Appendix Conclusions 5 Results Numerical 4 Behavior Russia’s Modeling 3 Inputs Model 2 Market the of Players Main The 1 Introduction . ouino h Model the of Model Solution the of Setup 3.2 The 3.1 Costs Production Function Supply 2.3 Function Fringe Demand Global Oil 2.2 Crude 2.1 Behavior OPEC’s on Russia Assumptions in Sector Oil 1.2 The 1.1 . pcfi ucinlForms Functional Specific 3.3 .. usaa taei Player Strategic a as Russia Price-taker a as 3.2.2 Russia 3.2.1 Calibration OPEC for Cost 2.3.3 Production Russia for Cost 2.3.2 Production 2.3.1 11 ...... 14 ...... 19 ...... 10 ...... Contents 18 ...... 3 ...... 22 ...... 19 ...... iii 5 ...... 12 . . . . . 8 ...... 20 ...... 13 ...... 39 35 32 24 17 8 1 3 CEU eTD Collection A.2 A.1 4.1 2.2 2.1 PCspotfnto hp for shape function profit for OPEC’s firm dominant a as OPEC percentages in Russia and OPEC for change Profit calibration cost marginal OPEC’s calibration cost marginal Russia’s ito Figures of List ǫ w = ǫ w 16 . 15 ...... − = 0 . − 34 iv 0 . and 34 and ǫ w 0 = ǫ w 27 ...... 0 = . 384 . 384 36 ...... 37 ...... CEU eTD Collection B.10 B.9 B.8 B.7 B.5 B.4 B.3 B.2 4.1 qiiru rneqatt ntesrtgcscenario strategic the in quantity scenario fringe strategic Equilibrium the in quantity scenario Russia strategic Equilibrium the in quantity OPEC scenario Equilibrium strategic the in scenario price price-taking Equilibrium the in quantity scenario fringe price-taking Equilibrium the in quantity scenario Russia price-taking Equilibrium the in quantity OPEC scenario Equilibrium price-taking the in price sc Equilibrium strategic the to price-taking the from change Percentage ito Tables of List v 42 ...... 40 ...... 44 . 43 . . . 43 ...... 42 . 41 . . . 41 ...... nro(averages) enario 25 ...... CEU eTD Collection h raiaino erlu xotn onre (OPEC), mai Countries The Exporting Petroleum jump. of price Organization a the triggered turn in which shock demand the ih eitne o usat s t i oeta n c as act and potential oil its use to Russia for Loca intended and be (Boussena might level price the slow defending the for favor exports to and seems Russia in regime political present regaining the state the with Moreover, p economy. oil its global for as element player, passive a sit be a cannot such In producer non-OPEC downward. price sup the pushing the of But effect reverse increase. the price the from gaining for productions players, non-OPEC the vulnerabl prices. very them makes reliance pro absolute oil This on income. rely of they because countries woul oil-producing prices, some consequently and of demand, oil consumers in oil decline big a the hand, putting day, consequ every and price resource, oil limited the a boosts is Oil ope shortages. stop oil simply rience would economies world biggest the Nowadays, owy ntdKndm zrajn aahtn mn Syria, Sudan. Gabon, Oman, Guinea, Kazakhstan, Equatorial Egypt, Azerbaijan, Vietnam, Malaysia, Kingdom, United Norway, aa,SuiAai,Uie rbEiae,Venezuela. Emirates, Arab United Arabia, Saudi Qatar, 1 2 o ntne h ol i akthsltl xiie some exhibited lately has market oil world the instance, For rsnl,teOE onre r:Agra noa Indonesi Angola, Algeria, are: countries OPEC the Presently, o-PCcutis usa aaa eio ntdSae,Ar States, United Mexico, Canada, Russia, countries: Non-OPEC 2 hc eie hti a rfial o hmt os their boost to them for profitable was it that decided which Introduction 1 ,Ia,Ia,Kwi,Lba Nigeria, Libya, Kuwait, Iraq, Iran, a, etn,Bai,Clmi,Ecuador, Colombia, Brazil, gentina, nl,teicesn demand increasing the ently, t oto vrteolsector, oil the over control its ee,Asrla hn,India, China, Australia, Yemen, otevltlt folworld oil of volatility the to e uto stermi source main their as duction nodffiut.O h other the On difficulty. into asl i h economies the hit harshly d el,20) uhadecision a Such 2005). telli, l upmyi unhave turn in may jump ply dw fteolproduction oil the of -down 1 ain usa h greatest the Russia, uation, iesaiiyi resurgent a is stability rice tag hnmn u to due phenomena strange on teftraee by threatened itself found aigsol hyexpe- they should rating taei lyr rather player, strategic a lyro h market, the of player n CEU eTD Collection noasrtgcone. f strategic behavior a its into changing by rent the considerable setting a in capture power might OPEC’s undermining price-taker, a than eairo h ol i aktbcueti shwi a hav can it commodity. how this is for this because market oil world oppos the as on actions behavior strategic Russia’s trigger also could profitab price industries do oil countries their makes East dollars/barrel Middle 10 the as low than more S prices tim Eastern oil of toward high period shift desire prolonged production a the for with price-taker especially a cost, as i act and to price, reliance wiling oil Its be global the market. to sensitive oil very world economy the Russia’s of player a strategic potential oil a its into use to intentions Russia’s for arguments, poli the dec by production also but the companies, as maximizing role, profit its individual has In factor market. oil political global the the that on player a as strategy its Rus change production, to oil on maker decision single one of emergence mlytetoso aeter obidasyie ttcol producers. static fringe stylized non-OPEC a the build and Russia to OPEC, theory players: game of tools the the with employ relations I its in tool better-o political economically international Russia an is as extent what to it answered game leader-follower be Stackelberg a in rent the from capture stesaecnrloe h i opne nRsi sincrea is Russia in companies oil the over control state the As hstei samda erhn o aetertcmotivat theoretic game for searching at aimed is thesis This hs h ants fti td st nwrteqeto how question the answer to is study this of task main the Thus, 2 ao oes o hspurpose, this For powers. major e hsdsrblt fahg oil high a of desirability This le. t otepietkn passive price-taking the to ite nisrmn otransform to instrument an s ihOE.Teqeto to question The OPEC. with sosaentmd nyby only made not are isions bra eemnsRsi to Russia determines iberia, ia administration. tical o rc-aigbehavior price-taking a rom osqec,i ih not might it consequence, n i a o h opportunity the now has sia hsfaeoki sevident is it framework this nteolidsr makes industry oil the on o,i diint political to addition in ion, o hmee rc as price a even them for ; oeo rc formation price on role a e rmuigisolpower oil its using from ff gpl oe ihthree with model igopoly rc.Mroe,Russia Moreover, price. .Tehg production high The e. ig eutn nthe in resulting sing, uhRsi can Russia much CEU eTD Collection eevsi oprsnwt h ideEs xrcosadl and extractors East Middle the with comparison produ in high reserves are Howeve which among 2005). drawbacks, few Locatelli, a by and characterized (Boussena 1 2020. to until close 10.6 production and its increase could Russia that Outlook) internation monthly from IEA predictions the are to there Furthermore, according 2006, 2007. in s b/d data million 9.7 (IEA) to Agency close Energy International ind last - the block i as OPEC exports the Arabia, the after producer of oil 42% largest and second 2003 the now in industry output oil industrial the total on the relying of highly is that economy an Russia is in Russia Sector Oil The 1.1 O of assumption. assumption cartel the the motivating i.e to descript and short industry a oil providing Russian to the devoted is chapter producer This fringe the Russia. of pool the from Int themselves the distinguish in a acknowledged industry, As oligopoly consumers. an infinite as virtually defined and be can market oil world The h anPaeso h Market the of Players Main The hpe 1 Chapter 3 laece IA ol Energy World (IEA, agencies al nti akt PCand OPEC market: this on s mtdsaecpct,which capacity, spare imited outo,tomi players main two roduction, o ftepeetsaeof state present the of ion . ilo / ni 2010 until b/d million 0.4 to ot,lmtdproven limited costs, ction vdal upsigSaudi surpassing ividually os-wt production a with - hows ,Rsi’ i nutyis industry oil Russia’s r, i rdcinws28% was production oil - eotrlae nMarch in released report 04(opo) tis It (Tompson). 2004 n hr r e suppliers few are there s E sasnl player, single a as PEC CEU eTD Collection h bonedrvlto’adtetxrgm nRsi,whic Russia, in regime tax facto the and political revolution’ in ’brownfield stand the this for l the Explanations becoming of 2007). potential (Low, the has it although future, Russi the that in industry, extraction oil the admini of Moscow 50% than the afterm more from trols the signals in been production have there oil Union, the Soviet in boom the after ertheless, end. hncueepr,det h urn usa xotdt syst duty export Russian current the to due a export, products crude refined than because extraction dire crude more the now to are than Russia level in companies oil come new have the to of seems investment fields these of exploration the ’br expensive from less coming profitable, most the for o except the fields, discourages new Russia in place ta in the currenlty addition, regime litical In fields. these in opportunities shorten remaining have which companies, oil the authoritarian of government’s renationalization the brow mainly the is it of if decline or the depletion if clear not still is it Particularly, behavior. price-taking its reflect addition, in may, i opne r eeydie ypotmxmzto,thus maximization, profit obj by easier driven an merely even are be companies cont will oil state this of driven, increase politically the are with curbs hand, other the on But, Russia. reso oil the conserve to order in exploration o management in better investments a involve should this is and prices policy oil oil high Russian the is Therefore, Russia growth. - economic 2005) its Locatelli, for and (Boussena GNP its in increase 1 aey usahsrapae ntegoa i aktseea scene market oil global the in reappeared has Russia Lately, l atr etoe bv otiuet lwdw fcru of slow-down a to contribute above mentioned factors All estv owrdolpielvl,-a1%ices nolpr oil in increase 10% a - levels, price oil world to Sensitive e h usa n apa nryWTH 05fradtie a detailed a for 2005 WATCH, Energy Caspian and Russian the See HPE .TEMI LYR FTEMARKET THE OF PLAYERS MAIN THE 1. CHAPTER 4 filsi aua euto the of result natural a is nfields dfrhrdvlpet fthe of developments further ed il hog t cin fthe of actions its through will, lcmaisfo netn in investing from companies il urce. wfils.Bttees gains easy the But ownfields’. udnipsdb h po- the by imposed burden x s swl si h iisof limits the in as well as rs, ih uti t production its curtail might a ciet ufil h private The fulfill. to ective retetatri h world the in extractor argest emr rfial o export for profitable more re ocnrbt omaintaining to contribute to upt nldn increased including output, f c rnsa22 additional 2.2% a brings ice aiy fteRsinolboom oil Russian the of nalisys eesnwinvestments. new deters h t fteclas fthe of collapse the of ath em. rdcn n exporting and producing oa n.Mroe,the Moreover, end. an to eyn nhg i prices oil high on relying tain hc o con- now which stration, o,i h i production oil the if rol, epouto rwhin growth production de tdt h downstream the to cted rca lyr Nev- player. crucial a s 1 CEU eTD Collection eeu oe,wihrslsi akadbnigspl sc supply bending backward a in be results OPEC’s which of models model, conclusive revenue less o other, based two framework also competitive are a There in quoted acting MacAvoy as Paul OPEC (eg. considered researchers some sing However, behavio a OPEC’s to models. often, respect Most with behavior. literature OPEC’s describing the for in consensus no is Behavior There OPEC’s on Assumptions 1.2 cart OPEC the of position the challenge to now and has Russia strategically No that means and this East language, Middle theoretic game the a into namely regions, producing mark oil its other increase on to seeking impor market, an oil play global can the Russia influence market, c oil second world A tense a resources. of of framework renewal result the state and the exports by sector production, oil the back exploration taking granting of process of This manner discretionary the throu investors are foreign which the removing is and industry oil m the oil global the on player a as strategy its change to resul Russia a for As companies. private the rat than discount decisions different production have will state the o that of is conservation expected the be and reserves oil the of value als future but the extraction, oil from revenue the with concerned objectives. only revenue to addition in wit interests concerned strategic state Russian has also the companies, being oil the prices, unlike But, given capacities. at possible as much as 2 nsot h urn elt sta h usa oeneti government Russian the that is reality current the short, In e o xml h eeg at ewe usaadSuiAra Saudi and Russia between pact’ ’energy the example for See HPE .TEMI LYR FTEMARKET THE OF PLAYERS MAIN THE 1. CHAPTER 5 hsmasta h tt snot is state the that means This steonro h resources, the of owner the as , i,Spebr2003. September bia, ihteolmre stability, market oil the with o lrsucs ec,wa sto is what Hence, resources. il s n osqety different consequently, and es, tsaeadt aninfluence gain to and share et havreyo en,among means, of variety a gh na nacdcnrlover control enhanced an in s ,i santrlconsequence natural a is it t, el. nraigiscnrlover control its increasing s n eeomn licenses. development and sdsrbduigcartel using described is r h potnt obehave to opportunity the air aeytetarget the namely havior, neunei hti the in that is onsequence eue n h property the and hedule, arket. emdlt eengaged be to model le h oto hi idle their of cost the h atgotaei oeto role geostrategic tant t Africa. rth upyaddemand. and supply n nGin 95 have 1985) Griffin, in 2 Translated CEU eTD Collection loteptnilpltclojcie n h oetcma domestic ma the welfare and objectives social political a potential than the rather also firm maximizing profit a who as a as OPEC OPEC between relationship incen the is free-riding here the objective main and countries member the disagree of internal interests the that such black-box, the However, a as cartel. OPEC a regards as behaving OPEC assume will I which in o h te ye fmdl,nml opttv,tre re target competitive, namely models, models. of types other the time, wher for same countries, OPEC the 11 At for hypothesis model production. cartel explain partial d to model ability cartel the partial in the dat model the that by found supported (1985) be Griffin to not addition, seem models other 19 the Griffin, all al., model, et (Kaufmann procedures hav econometric models and these data All production. oil for explanation rights n h rnecompetes fringe t the used: and are cartel partial a with industry countr the in producing oil competition the all of comprised not is it as cartel, be cartel about theory the with abil consistent OPEC’s is the causality of This evidence price, oil the statisticall to a output detected cartel’s author the which ratio for output period the of also period the during especially coordination output organization, of evidence finds influ Gülen to Thus, organization the cutbacks. of capability the in as produc well as member’s OPEC, OP of coordination that long-run assumption the The in OPEC. reflected be of behavior type cartel the gate utemr,Gln(96 sscitgainaayi and analysis cointegration uses (1996) Gülen Furthermore, nlgto hs nig,Iwl mlyagm hoei mode theoretic game a employ will I findings, these of light In foeaot h atlmdli eciigOE’ behavior OPEC’s describing in model cartel the adopts one If ` aCunt(hffr 01,o h rnebhvscompetiti behaves fringe the or 2001), (Shaffer, Cournot la a HPE .TEMI LYR FTEMARKET THE OF PLAYERS MAIN THE 1. CHAPTER 6 e.I h ieauetotpsof types two literature the In ies. infiatcuaiyfo the from causality significant y ecre saSakeegleader Stackleberg a is cartel he rket. ig ..18-93 hsis This 1982-1993. i.e. ning, havior. entse sn empirical using tested been e t oeecs aktpower. market exercise to ity a eeto smr frequent more is rejection eas ie r irgre,a the as disregarded, are tives et,tedffrn national different the ments, netepieb production by price the ence inadtettlotu of output total the and tion mn h ebr fthe of members the among eu n rpryrights property and venue eadRsi.Iwl model will I Russia. and le 5.Ecp o h cartel the for Except 85). mntstecompetitive the ominates aslt et oinvesti- to tests causality ftewrdolmarket, oil world the of l oe sdi hsthesis this in used model hnOE sapartial a is OPEC then , seGin 95.In 1985). Griffin, (see a ecudntrjc the reject not could he Ci atlshould cartel a is EC iie,disregarding ximizer, vely CEU eTD Collection h rdcinadt eal oke h rc nternesui range the in price the keep to able interests. be to and th OPEC production give the costs (Vat production $10-11 low to the compared and reserves $2 proven countries: the Sea North well the are or fields USA developing the and cos finding production for the costs Moreover, the including market. oil world the of leader approach. realistic very equi a symmetric to leading quantity, assu same this the identica of produce always consequence are a fringe As the functions. in production firms and cost the all that assumption the ab is the of drawback One 2001). (Diamantoudi, price-taker a as rc-ae,i nasmto nln ihtewrdolmark the oil world with the and with follower line the in assumption as an Russia is and price-taker, leader modeled a be as can OPEC market between oil world the that strategic assumption play the to Thus, interest economic pure Russia’s addit in in be Therefore, might problems. low of survivorship periods into long sector since oil prices, low not supplie of do case main costs in the production price-taker high a is the it time, and same the 2006) At in countries. production oil world the of i rvnrsre,a eotdb h nentoa Monet International the by bil reported 1212.9 as total reserves, the proven oil of (81% IEA reserves proven the by OPEC’s and reported 2007) as 2007, February in production oil world 3 nteohrhn,Rsi stescn ags i rdcrin producer oil largest second the is Russia hand, other the On (approxim OPEC of share market total the account into Taking PCpoe eevsi 00wr bv 0 ilo arl ( barrels billion 800 above were 2000 in reserves proven OPEC HPE .TEMI LYR FTEMARKET THE OF PLAYERS MAIN THE 1. CHAPTER 7 EDEooi ulo o 76) No. Outlook Economic OECD o opltclmtvtos it motivations, political to ion r ud 2005), Fund, ary rcswudptteRussian the put would prices lyo h ol i market. oil world the on ally treality. et pin h rnefim will firms fringe the mption, v-etoe atlmodels cartel ove-mentioned ira biul,ti snot is this Obviously, libria. eo h ot nurdby incurred costs the below so h PCcountries, OPEC the of ts n hyhv h same the have they and l lo usat eaeas behave to Russia allow aktpwrt control to power market e inbreswrdscrude world’s barrels lion nisrpr rmMarch from report its in ieaSakeeggame Stackleberg a like o eea European several for r nee,20) Hence, 2003). ansever, al o t members’ its for table tl 74 fthe of 37.4% ately h ol (11.36% world the rneatn sa as acting fringe 3 PCi the is OPEC CEU eTD Collection u lsiiis efid lsiiisrnigbten0.0 between ranging elasticities captur finds which He equation log-linear elasticities. a run uses estim He Cooper study, countries. same 23 the In for long-run. the for 0.6 0.0 and between 0.56 ranging elasticities reports demand, oil of ity econom of 0.43 sources two and quoting 0.11 (2003), of Cooper means respectively. find (2004) Roman and Dahl elasticities, ilb rsne ndti nChapter in w detail together in thesis, presented the be in will employed model the of structure The tde htetmt i eadeatcte ihrespect of with function elasticities a demand oil as estimate demand that global studies oil crude the Function establishing Demand For Global Oil Crude 2.1 of description the with proceed will I Ru players, detail. main in the considered of costs marginal the of forms about functional assumptions Secondly, supp the Russia. and excluding function fringe demand itive m oil theoretic global game a the of Firstly, specification the addressed. be to need issues of nasre f4 tde nsotrnad4 tde nlong-r on studies 49 and short-run on studies 46 of survey a In oe Inputs Model hpe 2 Chapter 3 oee,i re obidtemdl number a model, the build to order in However, . 8 n . o h hr-u and short-run the for 0.2 and 8 6ad019frteshort-run the for 0.109 and 16 oprice. to ti siae fpieelastic- price of estimates etric h oe nusbelow. inputs model the h rdcincssadthe and costs production the sbt h ogadshort and long the both es saadOE,hv obe to have OPEC, and ssia yshdl ftecompet- the of schedule ly dldvlpdhr needs here developed odel t h nltclsolution analytical the ith tsoldmn functions demand oil ates rc,Iueeconometric use I price, netmtdoldemand oil estimated un i eadelasticities, demand oil CEU eTD Collection where h i eadi nlsi ohi h hr n h long-run the and short the in both inelastic is demand oil the n ewe .3 n .6 o h long-run. the for 0.568 and 0.033 between and 0dlasprbre.Uigtedmn lsiiya param normaliz a will as I studies, elasticity econometric demand the by the supplied Using ranges the and barrel. 2006 per in dollars b/d Marke million 60 84.5 Oil was monthly oil the for in demand IEA World the 2007. by published 2006 world for the data for the data real with calibration through determined rc.I at assume I fact, In price. rvddb h IEA. the by provided utdaoe sueacntn lsiiydmn schedul demand elasticity constant a assume I above, quoted .2ad0.34. and t 0.02 respect with elasticity demand short-run The a obtained. and pric be price long-run and oil short real the GDP, both real specification, econometric of spec function They log-linear world. a the as of mand rest the and America economies, Latin developed economies, other i Switzerland, regions, zone, main Euro ten the for UK, demand the estimate they 2002, to Based 1984 behaviors. supply the non-OPEC and and curve OPEC demand between the guishing cartel, the inside members OPEC’s cooperative of the both captures which equation, structu The rule pricing market. oil the of specificity the for accounting ese l 20)dvlpasrcua cnmti oe of model econometric structural a develop (2005) al. et Dees olwn h ieto foldmn ucinspecificatio function demand oil of direction the Following ǫ w < 0 stewrddmn lsiiywt epc opieand price to respect with elasticity demand world the is − 1 ≤ ǫ w < 0 D eas,a oto h cnmti tde show, studies econometric the of most as because, ( p = ) 9 Ap ǫ w HPE .MDLINPUTS MODEL 2. CHAPTER coefficient e lsiiiso i eadcan demand oil of elasticities e eo h oe nopse a encompasses model the of re n o-oprtv behavior non-cooperative and elolpierne between ranges price oil real o i eadadpie use I price. and demand oil fteform: the of e o-aa sa transition Asia, non-Japan si h miia studies empirical the in ns cuigteUA Japan, USA, the ncluding . f n siaetede- the estimate and ify tr ihvle nthe in values with eter, ieted rmtheir From trend. time rc utae around fluctuated price upyshdl distin- schedule supply nqatrydt from data quarterly on A eotfo March, from Report t h ol i market, oil world the sacntn obe to constant a is A p rudtedata the around stegoa oil global the is CEU eTD Collection f046adafig upyeatct qa o0.384. to equal elasticity supply fringe a and anal case 0.406 base of the for use, they which in situations devehavioral They behavior. competitive and behavioral model two leadership under price market export and internal its between infiatdtriato h supply. the rat of price determinant lagged significant the a e that price suggests the study 1970 this However, in example, 0.05. For price. to respect est with squares supply least ordinary The variables. non control a other lagg Using and price, actual 1999. on rate to production 1900 current from the regresses starting data on states 48 lower fo 0.6 and short-run the for 0.03 Al-Sahlaw of elasticity paper, supply same the the in for Quoted long-run. the for 0.4 magn and the of supply world non-OPEC total quotin the al.(1995), for et elasticities Greene regions. non-OPEC el nine supply for find 6.03 They methodology. facto step economic three and a using institutional equation, political, of Fo mix for. a accounted employ be must factors other Therefore, crude. of betwee relation straightforward no is and there OPEC price-takers, outside countries of producing dearth oil a crude from the Although suffers sector energy on literature the cou over, producers non-OPEC the for function supply a Estimating Function Supply Fringe 2.2 nageae osateatct upyfnto fteoi the of function supply elasticity constant aggregate, an ihrgr otefntoa om si h aeo h ol o world the of case the in as form, functional the to regard With ial,ClaadDh 20)mxmz PCssca welfa social OPEC’s maximize (2000) Dahl and Celta Finally, utemr,Ryod 20)tssteeeto rc nprod on price of effect the tests (2002) Reynolds Furthermore, 10 HPE .MDLINPUTS MODEL 2. CHAPTER hi rdcin n h price the and productions their n dpie uuaieproduction cumulative price, ed ss ol eadelasticity demand world a ysis, mto hw eyinelastic very a shows imation -rdcn onre outside countries l-producing h long-run. the r td f00 o h short-run the for 0.03 of itude o ttcmdl o ohbe- both for models static lop ntne ese l (2005) al. et Dees instance, r e hntecretpieis price current the than her utntn(91,report (1991), Huntington g si siaigtesupply the estimating in rs eut o upyelasticity. supply for results db icl ak More- task. difficult a be ld siiisbten07 and 0.79 between asticities yohssfrOE:the OPEC: for hypotheses atct ftespl was supply the of lasticity 18)rprsestimates reports (1989) i usacnb oee as modeled be can Russia cinoe iefrUS for time over uction tm eismdl he model, series -time e ihadistinction a with re, ldmn,Iassume I demand, il CEU eTD Collection ag cnwegdaoe hs aagv netmt for ela estimate an an give Assuming data these mill above, barrel. acknowledged 41.15 range per of dollars supply 60 oil around Russia averaged sup less crude b/d non-OPEC million a non-OPE 9.69 in total the results a subtracted This reports I which IEA from The b/d, million 2007. March in report monthly where PCadecuigRsi fteform: the of Russia excluding and OPEC ihSuiAai salae ihapouto oto bu 2 about of cost production a with leader a as cos Arabia production of Saudi terms with in fields co oil production expensive least the the in that included not are expenses depreciation paym interest administr royalties, taxes, the Severance as extraction. well oil as electricity, a comprise and costs fuel lifting maintenance, or costs Production sunk. are t as costs func costs a extraction the as only cost include the will I assume and will production, I model. OP the for in functions later employed cost be production the co establish dis production to are in is world differences section enormous the by of thus parts and different variations in located fields oil Crude Costs Production 2.3 Russia. except fringe the for rc n h upyo h rnecutisecp o Russia for except countries fringe the of supply the and price rc.Aan steeooercetmtosso,tesupp the 0< show, is estimations that econometric the as Again, price. o airto gi s h ffiilsaitc o 06pr 2006 for statistics official the use again I calibration For ǫ f > ǫ f 0 ≤ stefig upyeatct ihrsett rc and price to respect with elasticity supply fringe the is 1 . B sacntn ob eemndtruhclbainwt real with calibration through determined be to constant a is S F ( p = ) 11 Bp ǫ f HPE .MDLINPUTS MODEL 2. CHAPTER ns mriain elto and depletion amortization, ents, eepoainaddevelopment and exploration he B sbln oteOE block, OPEC the to belong ts lteepniue o labor, for expenditures the ll tv xessncsayfor necessary expenses ative CadRsi,a hywill they as Russia, and EC n hstespl schedule supply the thus and . yo h rnei inelastic, is fringe the of ly t.I sawl nwfact know well a is It sts. vddb h E ntheir in IEA the by ovided t.Teproeo this of purpose The sts. ino h urn aeof rate current the of tion tct esr rmthe from measure sticity le yRsi n2006. in Russia by plied igihdb geological by tinguished o /.Tepiefor price The b/d. ion olr e arl The barrel. per dollars upyo 50.84 of supply C p stewrdoil world the is aafor data CEU eTD Collection rdcr ihacs f1 olr e barrel. per dollars 14 of cost a with producers rdcinfrRsi ilb ie ytefloigstep-wis following Thu the by (2006). given Fagan be from will 2005 Russia for for production data cost production construct the to order use in I above, mentioned As fields. margi th oil and step-wise of types brownfield a expensive assume less I the between production, differentiation Russia’s of case the Russia In for Cost Production 2.3.1 study. this of Nevertheless scope available. the be data complete and c accurate they and more estimations, cost qualitative are The model inflation. the in for used adjust and also I and costs production the functio cost the barre constructing in per hence, dollars output, nominal of function in 2005 in costs marginal total and h atta h aafrfu PCcutisi missing. is countries OPEC four same for the data use the to that chose fact I the another, to source co one thi upstream from OPEC, of consistent of estimates case because the Moreover, in me. and to find, available could I costs marginal on data (2006). cost Fagan in upstream (CERA) on Associates data Research the Energy Cambridge use I ba particular, In estimations qualitative authors. other conduct and costs marginal wise usa refil soeo h otepniefil o extrac 2005), for in field average expensive on most the of one is greenfield Russian 1 nodrt osrc h otfntos ohfrRsi n O and Russia for both functions, cost the construct to order In aa 20)poie h agnlcs o nigaddevel and finding for cost marginal the provides (2006) Fagan o oeo rdcinadepoaincss e aa,200 Fagan, see costs, exploration and production on more For 1 en upse nyb h aainsnswti h non-OP the within sands Canadian the by only surpassed being 12 HPE .MDLINPUTS MODEL 2. CHAPTER 6. sIueol h aaconcerning data the only use I ns nb mrvdsol other, should improved be an hsi nojciebeyond objective an is this , function: e h otfnto o Russia, for function cost the otepniegreenfield expensive most e foleuvln.Cs sa is Cost equivalent. oil of l t tcutylvlaenot are level country at sts e ntepbiain of publications the on sed ucin osrce here constructed functions in(. olr e barrel per dollars (9.5 tion siae rvddb the by provided estimates oreo aai pt of spite in data of source a otfnto with function cost nal ,temria otof cost marginal the s, hsi h otrecent most the is This sas h nydata only the also is s E,Iasm step- assume I PEC, pet production opment, EC CEU eTD Collection oe ohge,adIcluae h uuaiecpct as capacity cumulative the calculated I ord and I higher, Then to dollars/barrel. lower 3.9 of cost average weighted p an their a in with is countries data these which for costs for weighted countries the 8 computed wit the data for missing costs production the the imputed of I name Iraq, countries, and 4 Emirates remaining Arab the For United countries. OPEC prod 12 marginal the the of gives which (2006), her Fagan developed in model provided market data oil the fu of cost input the problematic available, most publicly not are costs OPEC’s OPEC Because for Cost Production 2.3.2 greenfield. a from g extracted cost oil marginal of the barrel of one branch upper The brownfields. the of ity eot ac 07.Tu,temria otfrOE stef the is OPEC for cost marginal the Thus, capac 2007). cumulative March the report, at points discontinuity with function where si h aeo h agnlcs o usa sueastep-w a assume I Russia, for cost marginal the of case the in As c the be to assumed is b/d million 9 at point discontinuity The q R steRsindiypouto aemaue nmlino ba of million in measured rate production daily Russian the is MC R ( q R = )        13 4 . 2 13 . , 3 , if if q 0 R q < ≥ HPE .MDLINPUTS MODEL 2. CHAPTER R 9 < outo aaiisresulting capacities roduction oitdwt ahcost. each with sociated 9 rdtemria ot from costs marginal the ered te rm20 Olmarket (Oil 2006 from ities cinfrti lyri the is player this for nction albe o muain I imputation, For vailable. cincssfrol out 8 only for costs uction .Nvrhls,Iuethe use I Nevertheless, e. vstecs fproducing of cost the ives ollowing: retmxmmcapac- maximum urrent yKwi,Qaa,the Quatar, Kuwait, ly h egtdaverage weighted the h s agnlcost marginal ise rrels. CEU eTD Collection where ttevle ntefloigfntoa form: functional following the cos on marginal values the the fun use fit short-run I use players. I both of costs constraints marginal capacity the of calibration the For Calibration 2.3.3 a and day otercpcte,adteeaewa inl htayo th of any that an signals OPEC weak both are that there and is capacities, reality their current to The cl produce enough. high to players is price the for unprofitable it capacity approaches making production infinity, when that Note exi model. the the assure of to needed convexity of properties nice investmen the no has and fixed be to assumed is capital bei when players, analysis, both of constraints capacity the incorporates edtrie hog calibration, through determined be where hsmria otfntoa omhstepoet fincre of property the has form functional cost marginal This q i O = q stediypouto aei ilo fbarrels. of million in rate production daily the is i ,O R, K < i eoe usaadOE,respectively, OPEC, and Russia denotes stediypouto lomaue nmlinbresper barrels million in measured also production daily the is MC O ( q O = ) MC                                        K 14 7 6 4 2 2 . . . . . i i 7 272 2 8 1 , ( stepouto aaiyi ilo arl per barrels million in capacity production the is , , , , q i = ) , 14 if if if if if if K 30 33 26 14 10 0 i b q < − . . . . . i 58 28 54 75 8 q q < O i q < q < q < q < , ≤ HPE .MDLINPUTS MODEL 2. CHAPTER O O O O O 10 gtu utbefrashort-run a for suitable thus ng ≤ b i < ≤ ≤ ≤ . tneo h neirsolution interior the of stence aadsrbdaoeadI and above described data t 8 14 spstv elprmtrto parameter real positive is lyr ol nraethe increase would players e ncpct smd.I also It made. is capacity in t 34 33 30 26 s ocpct,uls the unless capacity, to ose agnlcs approaches cost marginal , . tos hc atr the capture which ctions, 75 . . . . 23 28 58 54 sn agnlcs and cost marginal asing usaoeaeclose operate Russia d day. (2.1) CEU eTD Collection ilo / and b/d million agnlcssdsrbdaoe s es qaeerr m ( errors form functional square the least on a functions cost use marginal I above. described costs marginal Locat and (Boussena reser IEA proven the the to of according majority category, the recover’ second, explo and to 2000, reserves in proven 26.5% of to ratio the First, c problems capacity. main new two in Russia, for As 2007). O (IEA, 2007 February capacity in spare instance, For future. near the in capacity and ttelvl ie yteIAsOlMre eotfo Februar from Report Market Oil IEA’s the by given levels the at o usaadOE,rsetvl.Figures respectively. OPEC, and Russia for o h airto fteprmtr fti ucinlfor functional this of parameters the of calibration the For

K marginal cost 10 20 30 40 50 60 70 80 0 R 0 10 = iue2.1: Figure ilo /,Iotie h olwn agnlcs functio cost marginal following the obtained I b/d, million marginal cost step−wise 2 MC MC usasmria otcalibration cost marginal Russia’s O ( R q ( O 4 q = ) R = ) 15 output 2.1 34 after calibration 10 marginal cost 2.1 . 14 18 23 and − 6 . . .Asmn h rdcincapacities production the Assuming ). 68 52 − q R 2.2 q O HPE .MDLINPUTS MODEL 2. CHAPTER hwtesaeo h marginal the of shape the show e eevs hc dropped which reserves, red 8 E a ny4mlinb/d million 4 only had PEC elli,2005) to ofi h step-wise the fit to ethod e r nte’icl to ’difficult the in are ves udpeetinvestments prevent ould s h step-wise the use I m 2007, y 10 K O 34 = ns: . 23 CEU eTD Collection ot eoeadatrteclbaint h ucinlfor functional the to calibration the after and before costs etcatrpoie h ecito n h ouino th of solution the and description the provides chapter next constrain capacity impose which I costs, marginal Russia. convex excluding and fringe the of supply the and demand global osmaie h nusit h oe r utpiaief multiplicative are model the into inputs the summarize, To

marginal cost 100 120 20 40 60 80 0 0 iue2.2: Figure 5 10 PCsmria otcalibration cost marginal OPEC’s marginal cost step−wise 15 16 output 20 after calibration marginal cost HPE .MDLINPUTS MODEL 2. CHAPTER 25 ( m sfrOE n usa The Russia. and OPEC for ts model. e 2.1 diin s increasing use I addition, n 30 ). ntoa om o the for forms unctional 35 CEU eTD Collection hsmdli sasmdt eaea oiatcre u or to due cartel dominant a as behave Chapter to assumed is p it important model most this the is OPEC countries. producing three fringe assumes which the market, oil world thi the in of developed model model oligopoly The mod model. the the of to setup solution the analytical describe to is chapter this of purpose The ntne,ie h eadawy qastesupply. the equals always assuming demand market the world the i.e. model instances, will I and countries dis OECD will the I Moreover, 2007). Feb. productio Focus, crude (Russia its domestically of half only market th domestic account into its takes outside one if the assumption on restrictive traded a is is crude ma this of domestic supply the whole the disregards that it meaning that Russia, is crud model product, the homogeneous of a assumption extract players all that assume n ipicto ftemdli h non-differentiability the is model the of simplification One 1 Section , oeigRsi’ Behavior Russia’s Modeling 1.2 . hpe 3 Chapter 17 ta h rsn usatrades Russia present the at at ,teohrhl en refined being half other the n, eadteolsok edby held stocks oil the regard hssi ttcshort-run static a is thesis s lyr:OE,Rsi and Russia OPEC, players: lepoe n ogv an give to and employed el ae ftemre n in and market the of layer i.Aohrimportant Another oil. e fteolqaiy will I quality. oil the of kto ohOE and OPEC both of rket ol akt However, market. world aosakolde in acknowledged easons hti lasi l its all in clears it that CEU eTD Collection h rc eutn rmteSakleggm n determine and game Stackelberg the from co the resulting stage price last the the In constitut OPEC. stages and two Russia first between The quantities in game. the of stage op own second its the sets in and output of product choice OPEC’s its observes chooses Russia OPEC and following: the format is price game the the of allows timing and member each for ev quotas empirical announces the since OPEC and Russia between pric game a strategic b than rather fringe chosen the been has and model follower leadership a quantity as Russia with leader Stackelberg a p its reflecting cost, th marginal equals stage price second where it the output to its according in supply and its determines price and the price the sets observes OPEC simpl stage is first game the the of in timing The price-takers. cou are producing fringe, fringe the The price. the sets and demand residual ehooiso h anpaes hsi noprtdi th in functions. incorporated cost is marginal This constant fo players. account main I the and of symmetry, technologies of assumption classical competitive. the perfectly was drop market I the extra if fringe as the of operate rest they the is, assume I cases both q In in leader. game a Stackelberg as a as Russia behavio and Russia’s OPEC about between assumption competition the change then o I influence given. potential as its ignores a Russia r with model, the start the facing of I firm setting dominant the market. as this OPEC having on market, player oil a world as Russia model of market oil behavior world the the of versions parallel two Model devised the I of Setup The 3.1 h eodvrino h i aktmdli he-tg ga three-stage a is model market oil the of version second The ntefis cnro oe PCbhvn saprilmonop partial a as behaving OPEC model I scenario, first the In HPE .MDLN USASBEHAVIOR RUSSIA’S MODELING 3. CHAPTER 18 upyshdl.Rsi sets Russia schedule. supply s ietkn behavior. rice-taking h aktadtksprice takes and market the n edrhpfrmdln the modeling for leadership e tr en rc-aes that price-takers, being ctors n ossso w stages: two of consists and e eetees nm analysis my in Nevertheless, hc r ieetae by differentiated are which , ieet o-ier non- non-linear, different, e tisadRsi,a atof part as Russia, and ntries t upyi accordance in supply its s o ut ntefis stage first the in quota ion h edrfloe game leader-follower the e h ieetproduction different the r hvn opttvl.A competitively. ehaving n oe h duopoly the model and r pttv rneobserves fringe mpetitive dnesosta OPEC that shows idence ia ee fproduction of level timal o ntemre.The market. the on ion sda ead nthis In demand. esidual ei hc PCis OPEC which in me atte,wt OPEC with uantities, opttv fringe competitive e ipemdlo the of model simple ls,wihfcsa faces which olist, CEU eTD Collection si h eto h rne ilcos opoueweepric where produce to choose Russ will case, fringe, this the In of rest fringe. the the is of as rest monop the partial and a Russia be from to demand assumed is OPEC when scenario the is This Price-taker a as Russia 3.2.1 below. presented is scenarios solutio two The the respectively. Russia, and OPEC of functions cost ceueo h rneecuigRussia, excluding fringe the of schedule n usa epciey ehv hntegoa eadfunc demand global the then have We respectively. Russia, and httegoa eadadtefig esRsi upyaedi are price. supply to Russia less respect fringe the and demand global different the twice that and continuous However is form. function cost specific Russia’s no for that have model model the the to into solution functions analytical input an give I section this Model In the of Solution 3.2 function. supply its with eadadtespl ftefig rdcr xldn Russi excluding producers fringe the p of different supply for the gain fr and this rent demand of positive magnitude a the gain assess to will remains Russia It that is is model what the hence, of power; a outcome strategic Playing has Russia gain. game, Russian quantity the the of terms in resulting, outcome the e sfis nrdc oentto.W eoeby denote We notation. some introduce first us Let q to is above described scenarios market oil two the of aim The HPE .MDLN USASBEHAVIOR RUSSIA’S MODELING 3. CHAPTER p = S F C 19 ( R ′ p ( ) q Finally, . R ) q O C O and qasismria ot i.e. cost, marginal its equals e al.Adtoal,Iassume I Additionally, iable. ( fteolmre oe in model market oil the of n ieeatcte fteglobal the of elasticities rice q h eea aeweethe where case general the O eetal ucin with functions fferentiable tion ,i Chapter in a, ) q aeteassumption the make I , mpaigstrategically. playing om ob xetdfo the from expected be to olwro PCin OPEC of follower a s R and ls aigteresidual the facing olist a en price-taker, a being ia, atttvl compare uantitatively h uptfrOPEC for output the D C ( p R ) ( n h supply the and q R ) 4 eoethe denote . (3.1) CEU eTD Collection qain( Equation chooses nti etn ftemdl PC oehrwt usa face Russia, fringe: with competitive together the OPEC, model, the of setting Player this In Strategic a as Russia 3.2.2 price-taker. a is price Russia equilibrium when the gives problem maximization above The tcebr aebtenRsi n PC suul h solut the usual, As OPEC. and solv Russia between can game we Stackelberg Russia for function cost differentiable a Assuming nfc PCwl rdc h hl eiuldmn,sc tha such demand, i.e. equality, residual with whole satisfied the produce will OPEC fact In h betv ucin PChst ov h olwn prob following the solve to has OPEC function, objective the max hnOE ae h eiuldemand, residual the faces OPEC Then p q O π O 3.1 and max = ie usasspl curve: supply Russia’s gives ) p p omxmz t rfi ne h akteulbimconstrai equilibrium market the under profit its maximize to p £ D q O ( s.t. p + q ) O − q max q ( p,q R p O = ) S O = ≤ F ( D D q p HPE .MDLN USASBEHAVIOR RUSSIA’S MODELING 3. CHAPTER D π R ) ( ( O ( ( p − p p p ) ( max = ( = ) ) q ( − − O C p,q q , S R ′ 20 S F ) C O R F − RD ( )) R ′ ( 1 p p ( ) ) p − ) − pq − ( ) 1 − p ¤ ( O S = ) p ( − F ( C − ) C ( R ′ C R p ′ C ) O ( ) − D O q − 1 ¡ O ( 1 ( ( D q ( p q , p O p ) ) ( ) lem: ) R p o h qiiru fthe of equilibrium the for e − ftemre o h case the for market the of )) ) n usiuigfor substituting and h eiuldmn from demand residual the − o sfudb backward by found is ion S h osritwl be will constraint the t F S ( F p ( ) p − ) − ( C ( C R ′ ) R ′ − nt: ) 1 − ( 1 p ( ) p and , q (3.2) (3.3) (3.4) ) O ¢ in CEU eTD Collection oeta qain( equation that Note usiuig( Substituting n a e usasrato function, reaction Russia’s get can one n usiue n( in substituted and akteulbimcniin( condition equilibrium Market h rtodrcondition: order first The aiie t rfi ucinacutn o usasreacti Russia’s for accounting function profit its OPEC’ maximizes for constraint the constitutes It condition. librium wit function taking profit its maximizes Russia Firstly, induction. moisRsi’ ecinfunction, reaction Russia’s embodies aigtedrvtv ihrsetto respect with derivative the Taking · q ∂D O ∂p sgiven: as − 3.7 ∂S ∂p n( in ) F ¸ 3.8 − 3.9 1 3.5 ( yields: ) obnsterato ucinfrRsi ihtemre eq market the with Russia for function reaction the combines ) D max ilsteeuvln rtodrcniinfrRussia: for condition order first equivalent the yields ) ∂p q ( · R p ∂D ) ( ∂p ∂q q − ⇒ O R π q , 3.4 S − = 1 R q ∂q F R ∂p R a esle for solved be can ) ∂S ( max = ) R ∂p p = q HPE .MDLN USASBEHAVIOR RUSSIA’S MODELING 3. CHAPTER ∂D ) ∂p R F = − D q q + ¸ R R q · ( − ∂q q ( R ∂p p p O ∂D 1 q q ∂p ) ( R O R q + ) = q − 21 p R ) O ( − n( in oOE’ uniy ovn ( Solving quantity. OPEC’s to , q − q , q + S R p O F ∂S R ( p q , ∂S ∂p − 3.4 q ( ∂p ) p O − F R − C ) F ) ,i a esle for solved be can it ), ) . ∂q C − R ′ q ¸ ∂p C R ( R − q ′ R R D q ′ R 1 ( − O ( q : ( q R p C R piiainpolm OPEC problem. optimization s 0 = ) ) 0 = ) R nfnto n aktequi- market and function on − epc oisqatt and quantity its to respect h ( q S R F ) ( p ) − q O 0 = ) ∂p ( ∂q q O 3.5 R q , for ) R ) (3.8) (3.9) (3.5) (3.7) (3.6) : ui- q R CEU eTD Collection MC o usaa taei lyr nbt cnro sueth assume I scenarios both In player. strategic a as Russia for 2 OPEC: for problem mization ( equation through constraint librium h upyshdl o h fringe, the for schedule supply the o usaa rc-ae,and price-taker, a as Russia for npriua,ltu omlt h w cnro o h fun the for scenarios two the formulate us let particular, In Forms Functional Specific 3.3 rmteitgaino h agnlcss hc,i additi in which, costs, marginal the of integration the from ucin o PCadRsi,rsetvl,and respectively, Russia, and OPEC for functions C O sipt notemdl e srcl h lbldmn func demand global the recall us Let model. the into inputs as max ( rmtemria otfntos h oa otfntosc functions cost total the functions, cost marginal the From hn rbes( problems Then, q s.t. O p O ( = ) q · max £ O p,q Ap ∂D = ) ∂p O 1+ a O − s.t. K ǫ π w − O O ∂S − max p ∂p b p,q b − max = O − O F Bp O q ¸ ln( p,q ( O [ 3.3 − K 1+ q O 1 O K and R ǫ ( p n ( and ) f D O − − − pq ( − MC p Ap a K O ) O q R − O ǫ − w + 3.10 p R ) b S C + ( + R b and F q O O R oldw otefloigotmzto problems: optimization following the to down boil ) Bp ( b ( HPE .MDLN USASBEHAVIOR RUSSIA’S MODELING 3. CHAPTER p ln( = ) R q ) O S ǫ − C − f K 3.9 ) F R + K a ( O q ( p O .Teegv h olwn osrie maxi- constrained following the give These ). O q R q − = ) R + ) b 22 + O − R = ) ) q b O q + O p )] R Bp ln( − ( a o PCadRsi,respectively. Russia, and OPEC for Aǫ R ( C ǫ a K Ap f − O R w ′ n h agnlcs functions, cost marginal the and , O p ( ǫ > b ǫ w − D w R − − ( 0 Ap ln( p 1 n noprt h xdcosts. fixed the incorporate on, and ) Bp − K ǫ − tosdsrbdi Chapter in described ctions w Bǫ ǫ R + f S a − F − oa eadadthe and demand total e f R Bp ( nb eie.Hence, derived. be an p p q q ǫ > f ) O R ǫ − f tion, ) − ) 0 1 + ) r h oa cost total the are q r h constants the are O 0 = K 0 = ) D R − ( p = ) b R p − (3.10) (3.12) (3.11) Ap 1 ) ¤ ǫ w , CEU eTD Collection o h nes eiuldmn.Teeoe nodrt gene to order in ( Therefore, problems demand. impossibili residual the inverse from the mainly for comes problem The beha Russia’s model. for the scenarios the for of any for feasible not m is the form of equilibrium the for solving However, A. Appendix see quantity. ( o problem nonlinear that constraint for methods numerical using Matlab, that, such price, oil the to inelastic fringe the of supply rbe ( problem o ahmtclaayi fteeitneo h solution the of existence the of analysis mathematical a For 3.12 3.11 sannierotmzto rbe ntovrals pric variables, two in problem optimization nonlinear a is ) 3.11 n ( and ) sannierotmzto rbe noevral,tepr the variable, one in problem optimization nonlinear a is ) 3.12 eesle ihtehl fteOtmzto olo in Toolbox Optimization the of help the with solved were ) HPE .MDLN USASBEHAVIOR RUSSIA’S MODELING 3. CHAPTER 23 − 1 ≤ ir ie h nuschosen inputs the given vior, tmzto rbes Note problems. ptimization re na nltclclosed analytical an in arket aetenmrclresults, numerical the rate ǫ w o h bv problems, above the for s yo ovn analytically solving of ty < 0 and 0 n OPEC and e ǫ < f c,while ice, ≤ 1 . CEU eTD Collection o Russia. for hs h oa ot bandfo h nerto ftema the of integration th the from of does obtained purpose terms C costs the t both total to for influence the constant Moreover, not Thus, a does adding cost. situations, cost marginal behavioral fixed the short-run on in depends that is motivation nrae rmtepietkn otesrtgcseai ( scenario strategic o the daily to barrels price-taking 50,000 the about from with supply increases oil its Rus allows reduces behavior it strategic as the addition, In elasticit 1%. any below for well difference: insignificant an shows measure equili player. market each the for numerically solved Fo I parameters, parameters. such exogenous as supply fringe and demand global h ueia eut eegnrtdslig( solving generated were results numerical The eadadfig supply. fringe com various and for demand scenario, strategic the to price-taking the rc-aigbhvo,ie h rfisi h taei cas strategic the scenario. in taking profits the strateg i.e. acting behavior, better-off price-taking is Russia suggest: would intuition O 1 2 ( isl,i utb oe httenmrclrslsaei li in are results numerical the that noted be must it Firstly, q o h opeenmrclrslso h oe h edris reader the model the of results numerical complete the For o h aclto ftepot sue oa ot havin costs total assumed I profits the of calculation the For O 18 = ) . 2l 34 ln 52 1 Table 2 . 23 oee,tegisaeol nqaiaietrsa h quant the as terms qualitative in only are gains the However, 4.1 − 18 hw ytei ftecagso h aibe finterest of variables the of changes the of synthesis a shows ueia Results Numerical . 2ln(34 52 . 23 − hpe 4 Chapter q O ) o PCand OPEC for , 24 3.11 n ( and ) o ahmtclyiflec h outcome. the influence mathematically not gnlcss n sdi acltosare calculations in used and costs, rginal C epouto eiin ic hsonly this since decision, production he R eofie ot o ohpaes The players. both for costs fixed zero g stei,ie,cmaiggisi two in gains comparing i.e., thesis, is 3.12 eerdt pedxB. Appendix to referred ( q iain fpieeatcte of elasticities price of binations r ihrta nteprice- the in than higher are e R ru rc n uniisfor quantities and price brium 14 = ) cnroRsi’ an are gains Russia’s scenario y e Tabel see clya oprdwt the with compared as ically ,uigtepieeatct of elasticity price the using ), i osv t i resources oil its save to sia vrg,wieteprice the while average, n ieetcmiain of combinations different r ewt htter and theory what with ne . 8l 10 ln 68 4.1 − .Ide,the Indeed, ). 14 . 8ln(10 68 itative − from q R ) , CEU eTD Collection was ǫ rc pwt ny7cnsprbre.A rtgac,ti see this glance, first At barrel. per cents 7 only with up price aktsae fRsi n PC epcieyand respectively OPEC, and Russia of shares market eadadfig upy eiuldmn ilb inelastic be will demand residual supply, fringe and demand hntettldmn lsiiy oeta,ales qa,t equal, elasticity else demand all residual that, is the Note lower that the elasticity. lower, see demand total to the easy than is It Russia. niae htvr nlsi eadadfig upyelas supply fringe pri assumptions. and the demand currently inelastic that very fact that The indicates scenarios. elasticit both of in range barrel this per In c inelastic. the very for except are barrel, supply per fringe dollars 62 al to In 60 from game. is strategic span the price in barrel per cents few in a Nevertheless, than higher functions. dollars/ba supply 60 fringe of and case c demand base the very the of but than 1, higher than price greater the is is value, OPEC with together Russia by faced cnro nyfrvr o eadadspl elasticities, supply and demand low very for Only scenario. fu the in extraction oil a the in limit is to model, intentions the president’s by predicited as decline, supply oil Russian rd oa upt-.2%-.2%-.4%-0.039% 0.084% 0.036% 0.081% -0.045% 0.214% 0.018% -0.785% 0.065% 0.002% 0.078% 0.082% -0.469% -0.029% 0.040% 0.053% 0.005% 0.081% -0.025% -0.495% 0.087% 0.028% 0.040% output 0.001% Total 0.042% Supply Fringe -0.340% 0.044% Supply OPEC 0.022% Supply Russia Profit OPEC Profit Russia Price 3 = o ntne ftegoa eadeatct was elasticity demand global the if instance, For eody ntesrtgccs,tepiei lashge t higher always is price the case, strategic the in Secondly, eiuldmn ae yOE n usacnb optdusin computed be can Russia and OPEC by faced demand Residual 0 s . al 4.1: Table O 384 + 1 s h aecs nCla(00- usassrtgcbehavior strategic Russia’s (2000)-, Celta in case base the - R [ ǫ w − ǫ f n h oe is lower the and , ǫ ecnaecag rmtepietkn otesrtgcsc strategic the to price-taking the from change Percentage f s ohHg eadLw eadHg,Bt Low Both High, Demand Low, Demand High Both f ] where , ǫ rd stepieeatct ftersda demand, residual the of elasticity price the is ǫ w naslt au.Tu,w xetta o eyieatcgl inelastic very for that expect we Thus, value. absolute in upyHg upyLow Supply High Supply lsiiysensitivity Elasticity 25 s f HPE .NMRCLRESULTS NUMERICAL 4. CHAPTER eoe h aktsaeo h rneexcluding fringe the of share market the denotes . easlt au ftersda eadis demand residual the of value absolute he 0 . ilawy egetr naslt value, absolute in greater, be always will 406 ue(o,2007). (Low, ture e,tepierahs8 dollars 89 reaches price the ies, n h rnespl elasticity supply fringe the and iiismgtntb realistic be not might ticities ssweebt eadand demand both where ases l h ae,tepiei not is price the cases, the all h cnro nlzd the analyzed, scenarios the l rl sdi h calibration the in used rrel, crac ihteRussian the with ccordance ehsntrahti value this reach not has ce st eacounterintuitive a be to ms . h eiuldemand residual the i.e a nteprice-taking the in han h olwn formula: following the g oet nabsolute in 1 to lose nro(averages) enario s ol rv the drive would O and s R r the are obal 3 CEU eTD Collection cnroa oprdwt h rc-aigseai,frth for scenario, price-taking the with compared as Table scenario in seen Figure be Russia’s. can as large it as As twice Russia’s. Stackelber than lower the ga is in higher move cost first marginal has the it has pairs OPEC since elasticity surprising any not for and monopolist, a as the with consistent result a sp is OPEC’s this demand, Obviously, residual b/d. the million of ( values high low are for elasticities addition, supply In fringe the and million demand 1 over the has both OPEC market, capaci oil world spare the higher of maintain versions enoug both to have as not such does sufficiently Russia price model, the the of outcome the price by the shown from as enough benefiting for production its co boosting production high the as well as capacity, production difficu small more OPEC with game Russia’s makes constraint capacity case. strategic the co in results lower the is to which applied output, be can explanation same The supply. differ the and quantities, different words, on other played residu In are leadership different game. Stakelberg a the faces in players monopolist, both by a faced as fact OPEC, the fringe, in the stands of case this in monopoly explanation the The in price competition. higher a predicts theory the as result, fisotu euto,wihi o1 ie ihrta the than higher times Table 10 (see to elasticities 6 of is combination which reduction, output its Russia’s of Hence, power. strategic limited with player, capacity th small OPEC’s as of day, third one per than barrels less capacity, million production 0.3 below is capacity spare its hrl,i ohseaisRsi rdcsvr ls oisc its to close very produces Russia scenarios both in Thirdly, ial,OE rdcsmr salae,i h tcebr g Stackelberg the in leader, a as more produces OPEC Finally, 4.1 hw h hp fterltv rfisi h strategic the in profits relative the of shape the shows 4.1 .Tu,fo h ehia on fve,the view, of point technical the from Thus, ). 26 HPE .NMRCLRESULTS NUMERICAL 4. CHAPTER nei ie xcl yRussia’s by exactly given is ence t,hnesti rdcrfrom producer this hinders sts, ugssta usai tl a still is Russia that suggests , edn oiino OPEC. of position leading w lyr,a ucin of functions as players, two e ml ani h consequence the is gain small aeta nteStackelberg the in than case oe mle.Tesmall The implies. model e nrae ttesm time, same the At increase. vr05i bouevalue). absolute in 0.5 over htwe usai part a is Russia when that h oooyadquantity and monopoly the y nteohrhn,in hand, other the On ty. crigtettlmarket total the ncerning r aaiycnrah10 reach can capacity are / pr aaiy unless capacity, spare b/d n hnRsi.Ti is This Russia. than ins aeadmroe,its moreover, and game g ldmn hnteone the than demand al 4.1 tbcueterelatively the because lt rc nrae o any for increase, price m ihRsi,than Russia, with ame t an r almost are gains its , pct;o average, on apacity; oe oinfluence to power h CEU eTD Collection nattlwrdolspl euto rmtecs hnRussia when case the from reduction supply oil world Russia total offset cannot a fringe in the with together OPEC of elastiti increase demand global and threas supply the its surpasses of never choises fring supply reasonable the its but scenarios, 55%, both to In 50% of fringe. range the of ve supply strategic higher the a in is price higher a of t consequence by natural given confirmed the as unsurprisingly price is which the curve, takes supply player sloping this that fact The producers. mn l lsiiycmiain.Rsi’ rfi an hav scale. gains halved equilibr profit the Russia’s and combinations. elasticity supply all its among both values ela elasticity low towards these peak a for with skewed are supply, gains fringe profit OPEC’s and that demand global the of elasticity price the Profit e snwtr h icsintwrstetidpae fthi of player third the towards discussion the turn now us Let percentage change 0.05 0.15 0.25 0.35 0.45 0.1 0.2 0.3 0.4 0.5 0.2 0 iue4.1: Figure 0.4 Demand elasticity Russia ProfitChange 0.6 rfi hnefrOE n usai percentages in Russia and OPEC for change Profit 0.8 10 27 OPEC ProfitChange HPE .NMRCLRESULTS NUMERICAL 4. CHAPTER 0.2 Fringe supplyelasticity 0.4 iis eetees h supply the Nevertheless, cities. h aebhvo u ta at but behavior same the e epciey ti ayt see to easy is It respectively. u rc nraetemost the increase price ium so ftewrdolmarket oil world the of rsion a aktsaei the in share market a has e enmrclrsls Thus, results. numerical he odo 2mlinbd for b/d, million 42 of hold 0.6 srflce nisupward its in reflected is sspl ub,resulting curbs, supply ’s tcte,mil because mainly sticities, spr ftefig to fringe the of part is akt h fringe the market, s 0.8 1 CEU eTD Collection osat si a ese nTable in seen be can it kee As time constant. same the at intentions, inte saving financial resource the some not rather is it Possibly, grounds. economic have atrdb h ttcmdlcnito ihmria otan OPEC. cost rival, marginal Russia’s its high with Briefly, of compared consist 40%. model static around the of by share compared captured market player small a a has still which 200 is OPEC, April, Russia from Hence, report monthly 11.6%. its of in share IEA the by shown res This as 11%. data: elastici around only as is well model, the as from behavioral, resulting all share, In Russi world. individually the albeit in OPEC, producer with game strategic able be a to in power rent strategic sufficient have not does Russia view, ewe h rc n h eadeatct,adbtenthe between and elasticity, demand the firm, and dominant price the the between of e theory are microeconomic These the to inelastic. correspond more becomes demand su world Russia’s as price, increase the but reduces, quantity OPEC’s h fixed, addition, ity In higher. fringe becomes the elasticity and supply fringe price the the elasticity output, demand Russia’s residual Conversely, the of value. result a as comes This fri tic. the as increase should supply OPEC constant, elasticity rev export important most its hurting without resources pri its the influence to Russia allows behavior strategic a Hence, values elasticities the values. on elasticities lower game depending leadership b/d quantity 40,000 the to in 13,000 follower to a is it when case the nadto,Rsi’ hneo eair pr rmbigpo being from apart behavior, of change Russia’s addition, In ec,tesyie oe eie nti hsssosta f that shows thesis this in devised model stylized the Hence, lsiiysniiiyaayi hw ht nteprice-t the in that, shows analysis sensitivity Elasticity 4.1 rfi an r oe hntepouto curbs. production the than lower are gains profit , 28 HPE .NMRCLRESULTS NUMERICAL 4. CHAPTER ligtefig upyelastic- supply fringe the olding g upybcmsls inelas- less becomes supply nge kn oe,keigdemand keeping model, aking yseais usasmarket Russia’s scenarios, ty ei uhamne st save to as manner a such in ce ne h i xotrevenue. export oil the enue, igisolrvnerelatively revenue oil its ping etta usai fe,but after, is Russia that rest hc nrae nabsolute in increases which , l scnitn ihtereal the with consistent is ult ihhge eutosfor reductions higher with , pyadtefig supply fringe the and pply o rdcincapacity production low d upysol eraeas decrease should supply hsrdcinamounts reduction This . o h cnmcpitof point economic the rom stescn ags oil largest second the is a iial rvn ih still might driven, litically rc n h upyo a of supply the and price ocpueaconsiderable a capture to pce eut,frthey for results, xpected n oterelationships the to and ihtemre leader, market the with ,Rsi a market a has Russia 7, ao weaknesses major CEU eTD Collection h tcebr aebtenRsi n OPEC. and Russia between lo game the Stackelberg is the this for Russia’ explanation 0.4, The than elasticity. supply less fringe elasticities, demand low v and for 0.2, contrast, than In values. higher cons towards elasticity elasticity demand supply the keeping va when elasticity trend increasing 0.1-0.2 an around a peak has a supply with fringe elasticity, the supply Thus, jum price values. the elasticities to these due for because, a mainly has inelastic, supply more fringe the becomes 0.1, t below takes elasticities, player low this very that for fact the again star reflecting supply reduction, fringe The increases. elasticity quantit supply OPEC’s fringe and downwards Wh slopes price parameter. constant, this kept to is relative elasti shape supply convex a fringe exhibits low output For Russia’s and inelastic. output more OPEC’s becomes direction, demand opposite the ela In demand as value. behavior, price-taking its with conformity in price-taker. ag f04t . ihafig upyeatct f03t 0. to 0.3 of elasticity supply fringe a with fo 0.5 model to the 0.4 of of solution range optimal the to an corresponds data, IEA real the the by to closer t is From scenario strategic elasticities. the of output, combination any for b/d million scenario 20 price-taking 9.75 the for under supply that suggests actual model its the as and version, price-taking model, the static t my in of to calibration 2006 the according in Thus, used functions. I supply data the Russia report is 2007 this March as from data, data 2006 IEA’s the the again use I data. market tti on,i swrhpoiigacmaio ftemodel the of comparison a providing worth is it point, this At ntesrtgccs,ales h ae h rc increases price the same, the else all case, strategic the In 29 HPE .NMRCLRESULTS NUMERICAL 4. CHAPTER eiuldmn lsiiyfor elasticity demand residual w sdciig olwn h price the following declining, ts oevr h gr reported figure the moreover, d r o upyeatcte,less elasticities, supply low ery us usaspouto has production Russia’s lues. onadsoea t supply its as slope downward tsol aesple over supplied have should it s ocv hp eaiet its to relative shape concave epiea ie.However, given. as price he 4. epito iwo Russia’s of view of point he tct erae nabsolute in decreases sticity upydcesswt the with decreases supply s 6wso .9mlinb/d, million 9.69 of was 06 atadvrigtefringe the varying and tant lpsuwrswiethe while upwards slopes y n lotefig supply, fringe the also and edmn n rneless fringe and demand he iis eo .,Russia’s 0.2, below cities, eadeatct nthe in elasticity demand r ,tettldmn falls demand total the p, usaudrsple in under-supplied Russia ntedmn elasticity demand the en upydces sthe as decrease supply n mrfrigto referring am I and , srsl ihtereal the with result ’s CEU eTD Collection o-PCls usaspl rm20,o 11 ilo b/d. million 41.15 of 2006, from figur supply predicts Russia Tu less model non-OPEC the producer’. versions, ’swing both a in supply, as non-Russia th acting with collapse complies price under-supply a between OPEC’s preventing supplied have suggests. should model it the cases 0 as which below in - low 0.34, very under is is elasticity supply fringe the shoul unless it b/d, that predicts model static the whereas b/d, sup million OPEC’s situations. behavioral Russia’s of any for supply odcd n oto h ol i rc nsieo n attem any of formation. spite price in oil price on oil influence world the evident control is and it decide addition, to In tha interests interests. other political by likely driven most is supp cartel the optimal that its shows di and model, price supply This actual 2006. OPEC’s for between barrel difference per dollars 65.16 of average average beh (EIA) an might Association Russia Information which Energy p in reported cases, scenarios other the both the all in In barrel barrel. per per dollars dollars 89 0.2 to below 60 is from elasticity jump supply fringe e the demand and the value when absolute case the for except parameters, elasticity taeial nteln-u.Fo h nnilpito vi of s point could financial the From Russia s short-run, long-run. the the the in strategically that in fact gain the considerable Despite a bring OPEC. not with game a strategic assessed a be of should tw case capture the might between it rent choosing the in Nevertheless, indifferent be should Russia point, 4 ihrfrnet PC h oe hw htissupply its that shows model the OPEC, to reference With saraymnindaoe h rc osntehbtasign a exhibit not does price the above, mentioned already As ocuig h ucm ftesai oe eel ht fr that, reveals model static the of outcome the Concluding, noai nlddi h rnea tjie PCol sfo J from as only OPEC joined it as fringe the in included is Angola 30 HPE .NMRCLRESULTS NUMERICAL 4. CHAPTER w usai elh economy, healthy a is Russia ew, htOE tl a h power the has still OPEC that aesple vr3 million 30 over supplied have d nti ag h rc can price the range this In . nay 2007 anuary, l n20 a rud29.72 around was 2006 in ply 4 anttecssi nusin incurs it costs the gainst 1-adtegoa demand global the and - .1 rfi aiiainonly, maximization profit n eec,tgte ihthe with together fference, a oe hnteoptimal the than lower was svr ls oteactual the to close very es atct sls hn05in 0.5 than less is lasticity rn ptpieo crude, of price spot Brent to usat ansome gain to Russia of pt ilbnfi rmbehaving from benefit till nn otenon-OPEC, the to rning iei otn rud60 around floating is rice v.Ti slwrthan lower is This ave. mtemntr stand monetary the om ya eutdfo the from resulted as ly eairlstrategies. behavioral o 3ad2 ilo b/d, million 29 and 23 raiainsamof aim organization’s e rtgcbhvo does behavior trategic fiatsniiiyto sensitivity ificant CEU eTD Collection rv ob eyiprati h uue ic hr r fear 2015. are before there plateau since a future, reach will the production in important very be mo to Leaving prove future. the in production, value its its increase reducing could hand, behavior, other the On production. constrain much oil very not being thus, bo fund, reserves, stabilization enough its and account current its in surplus a with 31 HPE .NMRCLRESULTS NUMERICAL 4. CHAPTER db asn oemnyfrom money more raising by ed eoli h rudnwmight now ground the in oil re hi oeg consadin and accounts foreign in th ssgetdb strategic a by suggested as mn nlssta oil that analysts among s CEU eTD Collection sueapietkn cnro ic t pia uptin output optimal its since scenario, price-taking a assume i involves that Nor policy the international and Russian East the Middle of the instance of expansio industry oil The the arena. in international presence and the in ener position the major using a maker on decision only the industry as oil emerges the government As interests. economic has pure by started, than renationalization reasons industry oil the of process Russ if Russia, than better-off more is leader, market resour save the Russi to OPEC, terms it enables monetary behavior in strategic the that instead found but I and parameters, as elastici price supply pri the used the I against addition, behavior In strategic constraint. capacity the from supp Russia fringe of and gain demand qu the oil leader-follower global a elasticity in constant player used strategic I a as Russia and s behavioral taker emp two in I gains Russian production, the and compare quantitatively exploration over oil control Russian the regaining in is structure of change recent the by Motivated hs tbcmsaprn htRsi’ hneo eairsi behavior of change Russia’s that apparent becomes it Thus, h ueia eut ftemdlso htRsi under-sup Russia that show model the of results numerical The Conclusions hpe 5 Chapter 32 yo ol i eadadfringe and demand oil world of ty e.Frhroe on that found I Furthermore, ces. solpotential. oil ts endie oeb political by more driven been hscs saoe96 million 9.69 above is case this tain:Rsi saprice- a as Russia ituations: yfntos n assessed I and functions, ly snwsaedmntd the state-dominated, now is fteRsininfluence Russian the of n oe tlzdmdlto model stylized a loyed etkn eair under behavior, ce-taking niygm ihOPEC. with game antity yplc ops Russia push to policy gy nuty hr h state the where industry, hArcnrgosi one is regions African th apasstrategically. plays ia a eylwgains, low very has a c 04 hnthe when 2004, nce le n20,i we if 2006, in plied CEU eTD Collection h upyo h rnedcessbcueti lyri pr a is player this because decreases fringe the Russia of str and supply OPEC’s the the above, In as conditions less. same the supply under fringe creases the qua and the Russia elastic, while more the become increases, supply firm: fringe dominant the and the demand of the theory microeconomic the to respond aktspl elnsa usacagsisbhvo rmap a from behavior OPEC. its of follower changes Russia as world declines the supply of market version st price-taking the the in to oil relative less increases extracts Russia but higher, is str supply plays fringe Russia when Russia’s than higher profits relative the h agnlcs ucin.Amr rcs siain sw as estimation, precise more A the functions. of cost sensitivity marginal the the is m one come problematic study most The this in model. the presented results the whic of through limitations model the the of limitations the to subject are they mode the by predicted quantities optimal an the OPEC’s than by lower explained were is This hi dollars model. 5 the with from was resulted 2006 price for price The s model. a the had by Russia provided less producers tha fringe more the 2006 b/d in million hand, 2 other the least b/d at million with 30 output optimal around an supplied implies it shows; 2006 predict for model data the actual OPEC, Concerning power. strategic enough pre capacity production low relatively its that pr suggesting Russia scenarios both showin in data, addition, market In real strategically. the play to closer strate is a model assume the we of if outcome contrast, In IEA. the by reported as b/d, lsiiysniiiyaayi hw ht nteprice-t the in that, shows analysis sensitivity Elasticity oee,alterslspeetdi Chapter in presented results the all However, oprn h w esoso h ol i akt PChsb has OPEC market, oil world the of versions two the Comparing 33 4 utb eaddwt ato,as caution, with regarded be must HPE .CONCLUSIONS 5. CHAPTER et hspoue rmgaining from producer this vents dcsvr ls oiscapacity its to close very oduces i akt vrl,tetotal the Overall, market. oil kn oe,terslscor- results the model, aking aei ae hl h price the while game, rategic ice-taker. l smr cuaedt on data accurate more as ell hywr eie.Firstly, derived. were they h tgcly diinly the Additionally, ategically. pl eycoet h data the to close very upply i eairfrRsi,the Russia, for behavior gic eut oteclbainof calibration the to results htRsi ih indeed might Russia that g l. il rmteipt into inputs the from ainly usassple,which supplies, Russia’s d tgccs,tepiede- price the case, ategic hrta h equilibrium the than gher h eotdfiue On figure. reported the n n20,wietemodel the while 2006, in ihrspl hnthe than supply higher s tt upidb OPEC by supplied ntity sqatt nrae but increase, quantity ’s ietkrt quantity a to rice-taker rc erae when decreases price t h upyand supply the oth CEU eTD Collection infiatmntr an o usapaigstrategically capac playing higher Russia and for gains costs monetary production significant lower re circumstances i.e. different model, under the into Thus, power. strategic produc its its i lowering in more as with well as Nevertheless, capacity, extraction crude market. oil world the on p dominance market sufficient have not does Russia conditions, short-run a price, oil the boost that o attacks terrorist the frequent in the instability as and tensions play political the example, of for behavior by, rational optimal sty the a highlights Being only price. it i oil that the fact affect the may is which interests model economic the of limitation third s The one curve. around the calibration their with along forms, functional nyoepiti time. in rather point time, one over only profits produc discounted the give their could maximize model players dynamic a Moreover, cost capacity. long-run on employing analysis long-run a for extended inpu be constraint its capacity involving to setup model short-run a the of of instead sensitivity the scena for strategic testing the in in Russia needed of gain potential the robu to the respect assure could players main two the for costs marginal h eodlmtto oe rmteasmtoso lbld global on assumptions the from comes limitation second The oee,tebnfi fti td st hwta nteactual the in that show to is study this of benefit the However, 34 HPE .CONCLUSIONS 5. CHAPTER o ohpaes ymdlcan model my players, both for s incss usacudimprove could Russia costs, tion . enticue ntemodel. the in included not re lpouigcutis swell as countries, il-producing r.Ohritrsstriggered interests Other ers. nl rc-uniypiton point price-quantity ingle teso h rdcin with predictions the of stness i.Teeoe oewr is work more Therefore, rio. ucin ihn constraint no with functions aaees o example, For parameters. t ie ireooi model, microeconomic lized osntcpuetenon- the capture not does t hnbigcnendwith concerned being than wrt nemn OPEC’s undermine to ower t,temdlmgtshow might model the ity, utn ndffrn inputs different in sulting vsmnsi asn its raising in nvestments mn n rnesupply fringe and emand inptsi hc the which in paths tion otx n under and context CEU eTD Collection ecnaayepolm ( problems analyze can We h ih-adsd h agnlcs fOE.Ti stesta the is This OPEC. of cost marginal the side right-hand the ( in Thus, ǫ q problem: rfi ehv odffrnit ihrsetto respect with differentiate to have we profit w O ( ∈ A p oeta ( that Note eoigby Denoting eragn ( Rearranging = ) 1+ (1 [ − A 1 1+ (1 Ap Aǫ , ǫ 0] w A.2 w ǫ ) w and p p ǫ − w ǫ ǫ n a eonz ntelf-adsd h agnlrevenu marginal the side left-hand the on recognize can one ) w w ) 3.11 − Bp p − ǫ R T 1 ǫ A.1 f w − B ǫ ∈ sa nosrie piiainpolm omxmz OPE maximize To problem. optimization unconstrained an is ) − f O 1+ (1 Bǫ ,yields: ), − [0 B = K , f 1+ (1 1] p pq R ǫ ǫ ic h eadadfig upyaeinelastic. are supply fringe and demand the since , f f + O − ) p 3.11 1 ( ǫ piiainProblems Optimization b ǫ p f − R f ) ) pedxA Appendix p p − MR b h oa PCsrvneadtkn noacutthat account into taking and revenue OPEC’s total the n ( and ) − ǫ f R 1 K p n a opt h agnlrvnefrOE as: OPEC for revenue marginal the compute can one , − − R 2 K = + R TR ∂T b 3.12 ∂q O = K 35 O − K oecoey nwa olw,Iassume I follows, what In closely. more ) O O Aǫ O p − = − w n e h rtodrcniinfrthis for condition order first the get and Ap p TR ∂T Ap ǫ ∂q w ∂p ∂p ǫ w − ǫ O w 1 + O + + Bp Bǫ Bp b ǫ f f O ǫ p f + ǫ + f K − dr odto o the for condition ndard K 1 R + R − − b R b R b p R p − − p 2 1 − 1 0 = n on and e (A.1) (A.2) C’s CEU eTD Collection h xsec famxmmfrteojciefunction: objective the for maximum a of existence the el price and demand of elasticity price of choice particular ihoeeult osrit h qaiycntan sth is constraint equality The constraint. equality one with nlsi eadadfig upy eas ahtr fthe of term each because supply, fringe and demand inelastic hc stu for true is which agnlcs.Figure ma where cost. monopolist, marginal a for output of choice maximizing profit Aǫ Sf*+q*R b b w h eododrcniinms suetecnaiyo h p the of concavity the assure must condition order second The rbe ( Problem O O 1+ (1 ( ( q*O ( − K − −200 −100 Aǫ O 100 200 300 400 Aǫ ǫ w − 0 w 0 w ) ( Ap p p ǫ iueA.1: Figure ǫ 3.12 w ǫ w w ǫ − − − w 1 1 + Market demand 1) 20 sacntandmxmzto rbe ntovariables, two in problem maximization constrained a is ) − b + R p Bp Bǫ Bǫ ǫ w > ǫ − f f f A.1 2 1+ (1 p 0 + 40 + ǫ f n all and PCa oiatfimfor firm dominant a as OPEC K − Bǫ hw h pia rc n uniisi hsseai o a for scenario this in quantities and price optimal the shows 1 ǫ R ( f + K f ) − ( p 60 O b ǫ OPEC demand ǫ b R

f f p* R − − p − ǫ p 1 − OPEC marginalrevenue w Ap − + 1) 2 1 ) ewe 1ad0adall and 0 and -1 between ) 2 p ǫ 80 2 w ǫ f ≤ + − 2 Bp 0 36 − Price 100 ǫ 2 f OPEC marginalcost b R + p K − 3 120 R pedxA piiainProblems Optimization A. Appendix )( ǫ w − K = b O R − − akteulbimcondition. equilibrium market e p siiyo rnesupply. fringe of asticity 140 0 − Ap . 34 1 ) umto snegative. is summation 2 ǫ and w gnlrvnems equal must revenue rginal ǫ + 160 f otfnto n thus, and function rofit ǫ Bp Fringe plus ewe n ,i.e. 1, and 0 between w Russia supply 0 = ǫ f + 180 . 384 K p R and − 200 b R q p O − and , (A.3) 1 ) − CEU eTD Collection rtodrcniin are: conditions order first ec,w a en h arninfunction: Lagrangian the define can we Hence, h aiiigpit ( point, maximizing The ( ∂L ∂L ∂q ∂λ ∂p ∂L Ap L O ( ǫ ,q p, = = − w = − q p λ O p O [ − λ , Bp p −

− Objectiv function (profit), − ( = )

iueA.2: Figure Constraint K ǫ K λ −1000 f ( 7000 6000 5000 4000 3000 2000 1000 1+ [1 O R K − b 10 q − − 0 O R O q O p − Ap q b ( )( O R − K Ap ( Aǫ ǫ R − − a w 15 b O ǫ − Aǫ w + R λ w ( p + b PCspotfnto hp for shape function profit OPEC’s [ Ap ǫ + Bp R ∗ ( w w K q , b p Bp O − ǫ 20 ǫ R ǫ O ∗ w w f qO ln( ,ms aif h rtadscn re odtos The conditions. order second and first the satisfy must ), − − 1) + ǫ + f 1 K p Ap + Bp + q ǫ O w O 25 Bǫ q ) − ǫ ǫ O w − f 2 ( + ) b f + + Constrained maximum − q R p ( + O ǫ Bp Ap q Bǫ f ) 30 O − − Ap ) 37 1 ǫ ǫ f 2 w ) f ( ǫ ǫ + 1 + − w f − − q 35 Bp O − Bp 1) ) ǫ 2 pedxA piiainProblems Optimization A. Appendix f 0 p − ǫ − ǫ ǫ f f w − ( − q Aǫ = 2 O )( 50 q )( − O w Aǫ 0 Aǫ p )( . ǫ 34 w w Aǫ w Contraint surface p − 100 p and ǫ p 1 w w ǫ w − p − − ǫ 1 ǫ w 1 Bǫ w − 150 − − 1 0 = f Bǫ − Bǫ p ǫ . f f 384 Bǫ 200 f − p p ǫ 1 f f ǫ ) f − p − − 1 ǫ 1 f 1 ) 0 = ] − ) − − 1 2 ) 1 0 = ] (A.4) − 0 = 1 ] CEU eTD Collection opiae.Atraiey ecncektebhvo fth of Figure behavior the ically. check can we Alternatively, complicated. aifigtefis re odtos( conditions order first the satisfying fteLgaga function Lagrangian the of and function, fti sstse,then satisfied, is this ta If directions the of subspace the on semidefinite negative be n on a efud oevr h piu on o these for point optimum the Moreover, q found. be can well-behaved point is maximized ing be to function objective the that B rc for price O 41 = 33 = h eododrsffiin odtosrqieta o h st the for that require conditions sufficient order second The hcigtesffiinycniinfralclmxmmi this in maximum local a for condition sufficiency the Checking h eododrcniin r eie if verified are conditions order second The . . 15 06 ǫ × w and 60 = A.2 − p − 0 . 384 60 = 0 . eit h hp fOE’ rfi,a ucino t output its of function a as profit, OPEC’s of shape the depicts 34 h rp lutae ocv ufc nteae finter of area the in surface concave a illustrates graph The . ¯ ¯ ¯ ¯ ¯ ¯ ¯ ¯ ¯ ¯ ¯ ∂q . ∂ ∂ and 8 ∂p (¯ O sidctdi Figure in indicated as , 2 2 D p, L L ∂p 2 ( 2 q p,q ¯ ǫ O L f O ) ( ) ,q p, salclcntandmaximizer. constrained local a is 0 = L ∂p∂q (¯ p, ∂ ∂ ∂q O 2 2 . λ , q 384 L L A.4 O 2 ¯ O O ) = ) ¯ ¯ ¯ ¯ ¯ ¯ ¯ ¯ ¯ ¯ ¯ npriua,w have we particular, In . ,sc ht h esa arxo h Lagrangian the of matrix Hessian the that, such ), ob oa aiie,teems eareal a be must there maximizer, local a be to = ∂ ∂p 2        L ∂ 2 ∂p 38 2 ∂q ≤ L ∂ ∂ 2 ∂p O 2 2 ∂ ∂q 0 L L ∂p 2 A.2 2 L O 2 − . pedxA piiainProblems Optimization A. Appendix · ∂p∂q ∂p∂q ∂ ∂ ∂q ∂ 2 2 2 L L gn otecntan surface. constraint the to ngent O 2 L O O n osrie maximiz- constrained a and        betv ucingraph- function objective e ¸ 2 , ≥ lsiiyprmtr is parameters elasticity A aei computationally is case toaypoint ationary 0 84 = . 5 × 60 s,such est, 0 . 34 (¯ p, (A.5) (A.6) and and q ¯ O λ ) CEU eTD Collection upidb h opttv rne o ieetelasticit Russ different and for fringe, OPEC competitive players, the main by two supplied the by fo supplied model quantities the the of results numerical the includes Appendix This pedxB Appendix ueia results Numerical 39 e scenarios. ies h anvrals price, variables: main the r a n h quantity the and ia, 40 U dollars) (US USAA PRICE-TAKER A AS RUSSIA elasticity demand 1.000 0.600 0.560 0.500 0.430 0.406 0.340 0.300 Price total 99155.10 99715.00 99025.96 59. 59. 59.89863 60. 59.98783 59.90022 60. 60.01991 60.02079 59.90307 60. 60.09248 60.06541 60.07740 60. 59.90731 60.24493 60.16943 60.14557 60. 60.16445 60.32728 60.40172 60.31298 59.91009 61. 60.27391 60.71999 60.53462 60.72864 60.22598 60.56435 59.91135 61.20365 61.23569 60.99209 60.36828 61.41873 60.25529 62.22901 62.66101 60.76682 62.05598 60.41429 65.48887 62.09434 67.07161 60.87117 63.20038 75.03825 62.48729 72.11300 63.89754 84.46744 74.99270 89.62652 rnespl elasticity supply fringe .300 . . .0 .8 .0 .5 .0 .0 .0 1. 0.700 0.600 0.500 0.450 0.400 0.384 0.300 0.2 0.1 0.05 0.03

CEU eTD Collection al B.1: Table qiiru rc ntepietkn scenario price-taking the in price Equilibrium 94 98705.93 98625.99 59.89873 59.90407 59.89693 59.90776 59.92463 59.89692 59.91580 59.93513 59.93778 59.89736 59.93069 59.95755 59.95253 59.95629 59.93771 59.89780 59.99957 59.98438 59.97725 59.96439 59.96829 60.01992 89840 60.04543 60.02320 59.98794 59.99338 60.10141 98266 60.07568 60.11434 60.04908 60.17913 01285 60.20105 60.16095 60.16195 08082 60.32692 60.36416 60.22089 22225 60.58366 60.48665 29797 60.78801 65359 08204

000 pedxB ueia results Numerical B. Appendix 41 usa(mb/d) Russia (mb/d) OPEC Quantity Quantity elasticity elasticity demand demand 0.300 1.000 0.600 0.560 0.500 0.430 0.406 0.340 0.300 1.000 0.600 0.560 0.500 0.430 0.406 0.340 total total 37183.29 37243.40 37673.68 33. 33. 33.76480 33. 33.60821 33.75637 33. 33.57364 33.57274 33.74509 33. 33.50490 33.52941 33.51841 33. 33.73214 33.38135 33.44010 33.45954 33. 33.44408 33.32088 33.26846 33.33103 33.72493 32. 33.35955 33.06083 33.17906 33.05481 33.39563 33.15923 33.72188 32.77279 32.75365 32.89475 33.29151 32.64783 33.37340 32.21348 31.98800 33.03060 32.29967 33.25951 30.65725 32.27825 29.96671 32.96652 31.71110 27.13134 32.07169 28.05209 31.37017 24.57377 27.09832 23.43079 .59 .59 .59 .59 .59 .59 .59 9. 9. 9.75492 9. 9.75526 9.75492 9. 9.75539 9.75528 9.75493 9. 9.75566 9.75541 9.75542 9. 9.75494 9.75624 9.75571 9.75560 9. 9.75565 9.75654 9.75495 9.75633 9.75602 9. 9.75593 9.75797 9.75600 9.75666 9.75696 9.75660 9.75967 9.75645 9.75823 9.75497 9.75749 9.75827 9.75761 9.76015 9.75625 9.76027 9.75931 9.75497 9.76098 9.75683 9.76410 9.76572 9.75637 9.76344 9.75842 9.77584 9.75701 9.78113 9.76359 9.75883 9.80437 9.76772 9.76507 9.79643 9.77026 9.82621 9.80425 9.83621 rnespl elasticity supply fringe rnespl elasticity supply fringe .300 . . .0 .8 .0 .5 .0 .0 .0 1. 0.700 0.600 0.500 0.450 0.400 0.384 0.300 0.2 0.1 0.05 0.03 .300 . . .0 .8 .0 .5 .0 .0 .0 1. 0.700 0.600 0.500 0.450 0.400 0.384 0.300 0.2 0.1 0.05 0.03 CEU eTD Collection al B.2: Table al B.3: Table qiiru PCqatt ntepietkn scenario price-taking the in quantity OPEC Equilibrium qiiru usaqatt ntepietkn scenario price-taking the in quantity Russia Equilibrium 63 37033.71 37253.89 33.80739 33.74202 33.78999 33.73113 33.69492 33.78295 33.71211 33.67729 33.67316 33.77510 33.68449 33.64513 33.65186 33.64679 33.67329 33.77083 33.59513 33.61216 33.62051 33.63630 33.63139 33.57363 76630 33.54829 33.57029 33.60809 33.60196 33.49708 61415 33.51999 33.48586 33.54479 33.43245 58095 33.41512 33.44700 33.44618 51532 33.32132 33.29484 33.39969 39862 33.14760 33.21107 34206 33.01905 10261 84320 59 .59 .59 .59 9.75492 9.75494 9.75491 9.75496 9.75503 9.75491 9.75499 9.75507 9.75508 9.75491 9.75505 9.75516 9.75514 9.75515 9.75508 75492 9.75533 9.75527 9.75524 9.75519 75520 9.75541 9.75552 9.75543 9.75528 75531 9.75575 9.75564 9.75580 75553 9.75606 9.75615 9.75599 75599 9.75666 9.75681 75623 9.75769 75730 75851 000

000 pedxB ueia results Numerical B. Appendix 42 U dollars) (US upy(mb/d) Supply USAA TAEI PLAYER STRATEGIC A AS RUSSIA elasticity demand elasticity 0.300 1.000 0.600 0.560 0.500 0.430 0.406 0.340 Price demand total Fringe 1.000 0.600 0.560 0.500 0.430 0.406 0.340 0.300 total 993 991 997 991 99715.12 59.9137 60.0190 59.91423 60.0535 60.02505 59.91701 60.1292 60.06151 60.06260 59.9215 60.2827 60.14216 60.11245 60.1259 60.3635 59.9276 60.30715 60.22629 60.2007 60.7357 60.2215 60.39476 60.47405 60.3807 61.1750 60.3396 60.80461 59.9314 60.61348 60.8168 60.6469 61.29911 60.2883 61.33480 61.0888 59.9331 61.5293 60.4405 62.33731 62.7806 60.3199 62.1786 60.8589 65.6086 60.4894 67.2231 62.2212 60.9677 75.2066 63.3425 62.6222 72.3078 64.0503 84.7210 75.2175 89.9381 rnespl elasticity supply fringe .300 . . .0 .8 .0 .5 .0 .0 .0 1. 0.700 0.600 0.500 0.450 0.400 0.384 0.300 0.2 0.1 0.05 0.03 11874.49 11344.37 11964.22 41. 41. 41.12329 41. 41.14679 41.12946 41. 41.15524 41.15428 41.13670 41. 41.17434 41.16345 41.16061 41. 41.14364 41.21442 41.18483 41.16995 41. 41.16126 41.23605 41.23246 41.19284 41.14691 41. 41.16875 41.33892 41.25966 41.24946 41.15774 41.18854 41.14817 41.46506 41.40243 41.28519 41.16259 41.24628 41.15524 41.60278 41.50869 41.17614 41.28888 41.15850 41.87676 41.22065 41.61104 41.16780 41.25706 42.08070 41.20017 41.53010 41.22777 41.85976 41.42627 41.64841 rnespl elasticity supply fringe .300 . . .0 .8 .0 .5 .0 .0 .0 1. 0.700 0.600 0.500 0.450 0.400 0.384 0.300 0.2 0.1 0.05 0.03 CEU eTD Collection al B.4: Table al B.5: Table qiiru rneqatt ntepietkn scenario price-taking the in quantity fringe Equilibrium qiiru rc ntesrtgcscenario strategic the in price Equilibrium 99245.15 99975.00 59.90848 59.92278 59.90901 59.92800 59.95002 59.90997 59.93870 59.96293 59.96619 59.91150 59.95737 59.98968 59.98383 59.98834 59.96589 59.91254 60.03810 60.02088 60.01275 59.99742 60.00242 60.06107 8 60.08972 60.06505 60.02449 60.03133 60.15112 8 60.12317 60.16579 60.09404 60.23523 2 60.25914 60.21641 60.21767 9 60.39282 60.43283 60.28110 9 60.66427 60.56160 7 60.87329 6 1 21 11844.17 11774.05 41.08055 41.08421 41.10050 41.08674 41.11381 41.10757 41.09225 41.11885 41.12439 41.11479 41.10247 41.12962 41.13046 41.13501 41.10728 41.11844 41.14980 41.14357 41.14220 41.12557 41.14021 41.15956 12211 41.16869 41.15795 41.14173 41.14796 41.19867 14524 41.18113 41.18919 41.16514 41.23596 15353 41.23268 41.20516 41.19995 17216 41.28438 41.27469 41.21810 21090 41.34966 41.29986 23162 41.39233 32872 44525 000

000 pedxB ueia results Numerical B. Appendix 43 usa(mb/d) Russia (mb/d) OPEC Quantity Quantity elasticity elasticity demand demand 0.300 1.000 0.600 0.560 0.500 0.430 0.406 0.340 0.300 1.000 0.600 0.560 0.500 0.430 0.406 0.340 total total 37123.29 37203.41 37653.68 33. 33. 33.76487 33. 33.60865 33.75645 33. 33.57421 33.57320 33.74515 33. 33.50580 33.53003 33.51889 33. 33.73220 33.38304 33.44112 33.46020 33. 33.44452 33.32305 33.27055 33.33219 33.72497 32. 33.36018 33.06580 33.18184 33.05754 33.39601 33.16042 33.72192 32.78213 32.76121 32.89869 33.29206 32.65134 33.37374 32.22960 32.00189 33.03168 32.30516 33.26000 30.68915 32.28168 29.99007 32.96749 31.71702 27.17241 32.07492 28.07489 31.37574 24.60894 27.11868 23.46147 .27 .20 .28 .23 .26 .27 .28 9. 9. 9.72888 9. 9.71405 9.72870 9. 9.71163 9.71360 9.72767 9. 9.70746 9.71113 9.71106 9. 9.72634 9.70160 9.70687 9.70829 9. 9.70763 9.69931 9.72488 9.70087 9.70349 9. 9.70444 9.69223 9.70367 9.69852 9.69672 9.69888 9.68762 9.69997 9.69132 9.72409 9.69410 9.69118 9.69357 9.68672 9.70145 9.68648 9.68834 9.72376 9.68536 9.69747 9.68268 9.68205 9.70052 9.68301 9.69067 9.68355 9.69642 9.68599 9.68291 9.68949 9.70075 9.68175 9.68221 9.69523 9.68192 9.71621 9.70051 9.72323 rnespl elasticity supply fringe rnespl elasticity supply fringe .300 . . .0 .8 .0 .5 .0 .0 .0 1. 0.700 0.600 0.500 0.450 0.400 0.384 0.300 0.2 0.1 0.05 0.03 .300 . . .0 .8 .0 .5 .0 .0 .0 1. 0.700 0.600 0.500 0.450 0.400 0.384 0.300 0.2 0.1 0.05 0.03 CEU eTD Collection al B.6: Table al B.7: Table qiiru PCqatt ntesrtgcscenario strategic the in quantity OPEC Equilibrium qiiru usaqatt ntesrtgcscenario strategic the in quantity Russia Equilibrium 63 37013.71 37333.90 33.80747 33.74227 33.79007 33.73143 33.69523 33.78303 33.71249 33.67770 33.67352 33.77518 33.68504 33.64569 33.65232 33.64720 33.67391 33.77091 33.59601 33.61281 33.62104 33.63720 33.63181 33.57466 76638 33.54935 33.57103 33.60925 33.60250 33.49879 61460 33.52126 33.48716 33.54560 33.43486 58152 33.41738 33.44860 33.44762 51620 33.32474 33.29797 33.40150 40024 33.15086 33.21488 34413 33.02555 10723 85170 24 .30 .30 .39 9.73439 9.72600 9.73196 9.72478 9.72102 9.73102 9.72275 9.71935 9.71897 9.73000 9.72003 9.71653 9.71709 9.71666 9.71899 72945 9.71264 9.71390 9.71454 9.71581 71540 9.71114 9.70947 9.71090 9.71361 71313 9.70645 9.70775 9.70582 70924 9.70315 9.70235 9.70383 70379 9.69856 9.69762 70165 9.69333 69500 69049 000

000 pedxB ueia results Numerical B. Appendix 44 upy(mb/d) Supply elasticity demand Fringe 1.000 0.600 0.560 0.500 0.430 0.406 0.340 0.300 total 11824.46 11534.32 11224.24 41. 41. 41.12740 41. 41.15660 41.13292 41. 41.16619 41.16288 41.13922 41. 41.18741 41.17312 41.16726 41. 41.14503 41.23076 41.19650 41.17749 41. 41.16517 41.25375 41.24727 41.20209 41.14765 41. 41.17323 41.36103 41.27577 41.26143 41.15986 41.19415 41.14862 41.48988 41.42252 41.29827 41.16505 41.25370 41.15657 41.62449 41.52452 41.17925 41.29703 41.16003 41.89206 41.22486 41.62043 41.16976 41.26169 42.09014 41.20284 41.53570 41.23072 41.86604 41.42999 41.65274 rnespl elasticity supply fringe .300 . . .0 .8 .0 .5 .0 .0 .0 1. 0.700 0.600 0.500 0.450 0.400 0.384 0.300 0.2 0.1 0.05 0.03 CEU eTD Collection al B.8: Table qiiru rneqatt ntesrtgcscenario strategic the in quantity fringe Equilibrium 23 11304.16 11244.03 41.08723 41.09704 41.10631 41.10062 41.12600 41.11294 41.10796 41.13220 41.13609 41.11964 41.12076 41.14505 41.14334 41.14600 41.12661 41.12300 41.16829 41.15859 41.15437 41.14823 41.15075 41.17931 12634 41.18691 41.17230 41.16680 41.15967 41.22252 15523 41.20066 41.20681 41.17901 41.26286 16468 41.25654 41.22414 41.21711 18544 41.31144 41.29816 41.23664 22747 41.37716 41.32288 24956 41.41845 35110 47047

000 pedxB ueia results Numerical B. Appendix CEU eTD Collection 1]Gln .Gra,1996, Gürcan, S. Gülen, [10] 1]Kumn,Rbr ut rdod nrw eagr Lau Belanger, Andrew; Bradford, Kurt; Robert Kaufmann, [13] 2005, Fund, Monetary International [12] 2007 (IEA), Agency Energy International [11] 1]Lw oga,2007 Douglas, Low, [14] 1]Ryod,DulsB,2002, B., Douglas Reynolds, [15] 8 ree ai . oe,Dnl . eb,Pu .(1995), N. Paul Leiby, W.; Donald Jones, L.; David Greene, [8] 7 aa,MreN,2006, N., Marie Fagan, [7] 2001, Effrosyni, Diamantoudi, [6] 5 es tpae aaeolu als afan Robert Kaufmann, Pavlos; Karadeloglou, Stephane; Dees, [5] 9 rffi,Jms 1985, James, Griffin, [9] 4 al ao;Rmn als 2004 Carlos, Roman, Carol; Dahl, [4] 3 opr ..Jh,2003, John, C.B. Cooper, [3] 2000, A., Carol Dahl, J.; Daniel Celta, [2] 2005, Catherine., Locatelli, Sadek.; Boussena, [1] dependence BRIEF Elsevier 2005, uy81,2004 8-10, July a cnmcRve,7,954-963 75, Review, Economic can nry a,1995 May, Energy, uvyUpdate Survey countries www.green.ecn.ulaval.ca/Cahier at: available paper, ing ownership State and private between sector: oil Russian t Tests ity ii Yosuke, Miki, leirEioilSse o nryEoois Manuscrip Economics, Energy 06-00063R1 for System Editorial Elsevier tion? onre,OE eiw ue2002 June curve? Hubbert Review, the OPEC change Countries, prices do far how http://www.cdi.org/russia/johnson/2007-77-30.cfm , oeln h ol i akt seseto urel cnmti mode econometric quarterly a of Assessment market: oil world the Modelling EAAvsr evcs abig nryRsac Associat Research Energy Cambridge Services, Advisory CERA , eateto cnmc otnCollege Boston Economics of Department , PCReview OPEC , rprdfrOc fTasotto ehooyU .Depar S. U. Technology Transportation of Office for prepared , eemnnso PCPouto:Ipiain o PCBehavior OPEC for Implications Production: OPEC of Determinants 4hUAEIE ot mrcnCneec,Wsigo,D Washington, Conference, American North USAEE/IAEE 24th , unn ffteTp.I usaAotT a t i Produc- Oil Its Cap To About Russia Is Taps. the Off Turning PCbhvo:ATs fAtraieHypothesis Alternative of Test A behavior: OPEC sOE atl vdnefo onerto n Causal- and Cointegration from Evidence Cartel? a OPEC Is Bibliography nte eaeo iigUsra Costs?-DECISION Upstream Rising of Decade Another rc lsiiyo eadfrcueol siae o 23 for estimates oil: crude for demand of elasticity Price sn o-iesre odtriespl elasticity: supply determine to non-time-series Using tbeCresRevisited Cartels Stable nryDmn lsiiis-Fc rFcin A Fiction: or Fact - Elasticities Demand Energy i aktDvlpetadIssues and Development market Oil 45 PCa oilWlaeMaximizer Welfare Social a as OPEC i aktrpr,Mrh2007 March report, market Oil raiaino h erlu Exporing Petrolium the of Organization , h ae fanwognzto fthe of organization new a of bases The nvriyo Aarhus of University , sGREEN2000/00-02.PDF aH cagln John; McLaughlin, H; ra ubr ENEECO-D- Number: t h ulo o ..oil U.S. for outlook The . ace,Marcelo, Sanchez, K.; h Ameri- The , es mn of tment Work- , C, l , , CEU eTD Collection 1]RsinadCsinEeg AC,2005, WATCH, Energy Caspian and Russian [16] 1]Sae,Serl,2001, Sherrill, Shaffer, [18] 2007 Focus, Russia [17] 1]Tmsn William, Tompson, [19] 2]Vtnee,Ann 2003, Adnan, Vatansever, [20] n. 5CmrdePrwy abig,Msahsts0214 Massachusetts Cambridge, Parkway, Cambridge Control Sector 55 Energy Inc., of Levers Reclaim to Philadelphia http://eprints.bbk.ac.uk/archive/00000292/ Musings Back-of-the-Envelope Some Europe: h nlsso lblScrt,http://www.iags.org/n09 Security, Global of Analysis the urel i aktAayi,Fbur,2007 February, Analysis, Market Oil Quarterly osbeRsinDvlpetPtsadTerIpiain for Implications Their and Paths Development Russian Possible tbeCre ihaCuntFringe Cournot a with Cartel Stable rset nRsi’ tnetwrsOPEC towards Stance Russia’s on Prospects 46 abig nryRsac Associates, Research Energy Cambridge , , usa i omEd sSaeSeeks State as Ends Boom Oil Russian 29033.htm eea eev akof bank reserve Federal , 2 Bibliography nttt of Institute ,