OPEC Behaviour Under Falling Prices: Implications For Cartel Stability
Clifton T. Jones
The Energy Journal, 1990, vol. Volume 11, issue Number 3, 117-130
The surprising extended decline in real oil prices during the 1980s has raised the question of OPEC's continued viability as a price-setting cartel. In response, Griffin's (1985) tests of alternative hypotheses about OPEC behaviour performed over a period of generally rising prices (1971:1-1983:III) are repeated for the more recent period of falling prices (1983:IV-198R•1V), yielding the same general conclusions: most OPEC members continue to behave in a 'partial market sharing" way, while most non-OPEC oil producers do not. Thus the evidence suggests that recent oil price reductions are more the result of deliberate output adjustments by the cartel than the unintentional outcome of a breakdown in cartel discipline on the way to eventual collapse.
JEL-codes: F0 (search for similar items in EconPapers)
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