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A nonparametric approach to evolutionary oligopoly games: An application to the crude oil industry

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  • Moghadam, Hamed Markazi

Abstract

In this paper, I use a non-parametric revealed preference approach to investigate the empirical content of an oligopoly, with a relative maximization setup wherein players have different cost functions to produce a homogeneous good. Moreover, I present an empirical application to the crude oil market and its main producers and compare the rejection rates of the standard Cournot, the perfect competition, and relative maximizing hypotheses. The results show that the relative maximization model better explains the behavior of the major oil producers than the best-reply and price-taking models.

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  • Moghadam, Hamed Markazi, 2021. "A nonparametric approach to evolutionary oligopoly games: An application to the crude oil industry," Economic Modelling, Elsevier, vol. 101(C).
    • Handle: RePEc:eee:ecmode:v:101:y:2021:i:c:s026499932100136x
    DOI: 10.1016/j.econmod.2021.105547
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    More about this item

    Keywords

    Nonparametric; Oil market; Relative payoff maximization; Revealed preference test;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General

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