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The development of OPEC: an evolutionary game theory and agent-based modeling approach

Author

Listed:
  • Aaron D. Wood

    (The University of Tampa)

  • Charles F. Mason

    (The University of Wyoming)

  • David Finnoff

    (The University of Wyoming)

Abstract

Over the course of the 1960s and 1970s, the Organization of Petroleum Exporting Countries (OPEC) evolved from a largely ineffective and disorganized group into the dominant force in international crude oil markets. In this paper we employ a methodological toolkit comprised of evolutionary game theory and agent-based modeling to study the development of OPEC over this period. Our evolutionary game theory model incorporates energy-specific variables and behavioral considerations to depict the actions of cartel members over the period of interest. Our agent-based model provides detailed results and demonstrates the importance of growing oil reserves to the outcome of the model.

Suggested Citation

  • Aaron D. Wood & Charles F. Mason & David Finnoff, 2025. "The development of OPEC: an evolutionary game theory and agent-based modeling approach," SN Business & Economics, Springer, vol. 5(7), pages 1-18, July.
    • Handle: RePEc:spr:snbeco:v:5:y:2025:i:7:d:10.1007_s43546-024-00776-6
    DOI: 10.1007/s43546-024-00776-6
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    More about this item

    Keywords

    Evolutionary game theory; Agent-based modeling; Energy economics; Behavioral economics; Computational economics; OPEC; Petroleum;
    All these keywords.

    JEL classification:

    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • C88 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Other Computer Software
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General

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