IDEAS home Printed from https://ideas.repec.org/p/lvl/lagrcr/0002.html
   My bibliography  Save this paper

OPEC as a Social Welfare Maximizer

Author

Listed:
  • Celta, D.J.
  • Dahl, Carol A.

Abstract

We maximize OPEC's social welfare from their oil production including the domestic as well as the export market. For welfare maximization OPEC countries should set domestic oil price equal to the marginal revenues from the oil export market and, therefore, domestic oil price should be lower than the world price. Our base case price leader model yields a 1995 export price of $14.21/bbl (barel) and 27,042 MBPD (thousands of barrels per day) of OPEC exports with a domestic price and quantity of $5.22/bbl and 5,175 MBPD for the base case. However, with competition world oil price should fall dramatically to $6.40 per barrel with OPEC's world market share approaching 70%.

Suggested Citation

  • Celta, D.J. & Dahl, Carol A., 2000. "OPEC as a Social Welfare Maximizer," Cahiers de recherche 0002, GREEN.
    • Handle: RePEc:lvl:lagrcr:0002
    as

    Download full text from publisher

    File URL: http://www.green.ecn.ulaval.ca/CahiersGREEN2000/00-02.PDF
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Vatter, Marc H., 2017. "OPEC's kinked demand curve," Energy Economics, Elsevier, vol. 63(C), pages 272-287.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:lvl:lagrcr:0002. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Manuel Paradis (email available below). General contact details of provider: https://edirc.repec.org/data/grlvlca.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.