Deterrence, disruption, and nonlinear price dynamics at energy chokepoints

Masaaki Yoshimori ()
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Masaaki Yoshimori: McCourt School of Public Policy, Georgetown University

Economics Bulletin, 2026, vol. 46, issue 3, 1336 - 1346

Abstract: This paper develops a tractable sequential game of strategic interaction at critical maritime energy chokepoints, where geographic asymmetries generate disproportionate effects on global oil prices. We model a sequential game between a challenger and an incumbent in which oil prices are determined endogenously by a nonlinear function of disruption and deterrence. The interaction between diminishing returns to deterrence and convex deterrence costs generates threshold equilibria with three possible outcomes: effective deterrence, active disruption, and an intermediate regime in which disruption persists despite positive deterrence. The intermediate equilibrium provides a theoretical explanation for sustained price pressure and incomplete stabilization during periods of geopolitical tension. More broadly, the framework helps explain nonlinear oil price responses to geopolitical shocks and provides a tractable theoretical foundation for future empirical research on energy market dynamics.

JEL-codes: D4 L1 (search for similar items in EconPapers)
Date: 2026-09-30
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