Frugals, Militants and the Oil Market

Etienne Billette de Villemeur and Pierre-Olivier Pineau

MPRA Paper from University Library of Munich, Germany

Abstract: The oil market has often been modelled as an oligopoly where the strategic players are producers. With climate change, a new sort of game appeared, where environmental militants play a significant role by opposing some projects, to contain oil production. At the same time, consumers continue to use increasing amounts of oil, independently of oil price fluctuations. Should we oppose oil project, reduce demand or both? We investigate in this paper the double prisoner's dilemma in which individuals find themselves, with respect to oil consumption and their environmental stance towards the oil industry. We find that the collective outcome of such game is clearly better when a frugal behaviour is adopted, without being militant. The Nash equilibrium, resulting from the individual strategies, leads by contrast to the worst possible outcome: high prices, high consumption and high environmental impact. An effective environmental action should avoid opposing oil supply sources (a costly militant act) and help consumers becoming more frugal.

Keywords: Oil Market; Militants; Frugality (search for similar items in EconPapers)
JEL-codes: D01 D7 Q41 (search for similar items in EconPapers)
Date: 2018-08-01
New Economics Papers: this item is included in nep-ene and nep-gth
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https://mpra.ub.uni-muenchen.de/88933/1/MPRA_paper_88933.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/91535/10/MPRA_paper_91535.pdf revised version (application/pdf)

Related works:
Chapter: Frugals, Militants and the Oil Market (2020)
Working Paper: Frugals, Militants and the Oil Market (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:88933

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