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Cartel formation and oligopoly structure: a new assessment of the crude oil market

  • Sabine Bockem
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    While economic theorists regard OPEC as a perfect example of a long-lasting cartel, energy economists strongly deny such view. Applying the ideas of New Empirical Industrial Organization, a market description is derived. Cartel theory and empirical evidence fit together well. Stable long-lasting cartels can be explained only for subclasses of market models and exactly such type of model is obtained here. A variety of different market models is tested. OPEC and the market for crude oil is best described by a price-leader model.

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    File URL: http://www.tandfonline.com/doi/abs/10.1080/0003684042000191093
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    Article provided by Taylor & Francis Journals in its journal Applied Economics.

    Volume (Year): 36 (2004)
    Issue (Month): 12 ()
    Pages: 1355-1369

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    Handle: RePEc:taf:applec:v:36:y:2004:i:12:p:1355-1369
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