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OPEC's market power: An empirical dominant firm model for the oil market

Rolf Golombek (), Alfonso A. Irarrazabal and Lin Ma

Energy Economics, 2018, vol. 70, issue C, 98-115

Abstract: We estimate a dominant firm-competitive fringe model for the crude oil market using quarterly data on oil prices for the 1986–2016 period. The estimated structural parameters have the expected signs 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)
Date: 2018
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Related works:
Working Paper: OPEC’s market power: An Empirical Dominant Firm Model for the Oil Market (2015) Downloads
Working Paper: OPEC's Market Power: An Empirical Dominant Firm Model for the Oil Market (2013) Downloads
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DOI: 10.1016/j.eneco.2017.11.009

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