OPEC’s market power: An Empirical Dominant Firm Model for the Oil Market

Rolf Golombek, Alfonso A. Irarrazabal () and Lin Ma ()
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Alfonso A. Irarrazabal: BI Norwegian Business School
Lin Ma: School of Economics and Business, Norwegian University of Life Sciences

No 21/2015, Memorandum from Oslo University, Department of Economics

Abstract: We estimate a dominant firm-competitive fringe model for the crude oil market using quarterly data on oil prices for the 1986-2009 period. All estimated structural parameters have the expected sign and are significant. We find that OPEC exercised market power during the sample period. Counterfactual experiments indicate that world GDP is the main driver of long-run oil prices, however, supply (depletion) factors have become more important in recent years.

Keywords: Oil; dominant firm; market power; OPEC; Lerner index; oil demand elasticity; oil supply elasticity (search for similar items in EconPapers)
JEL-codes: L13 L22 Q31 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2015-12-17
New Economics Papers: this item is included in nep-bec, nep-com, nep-ene and nep-ind
References: View references in EconPapers View complete reference list from CitEc
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Related works:
Journal Article: OPEC's market power: An empirical dominant firm model for the oil market (2018)
Working Paper: OPEC's Market Power: An Empirical Dominant Firm Model for the Oil Market (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:osloec:2015_021

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