Stockpiling Strategies and Cartel Prices

Albert L. Nichols and Richard Zeckhauser

Bell Journal of Economics, 1977, vol. 8, issue 1, 66-96

Abstract: Consuming nations can stockpile cartelized commodities to suppress prices in future periods. This analysis employs a multiperiod framework and simple concepts of game theory to asses stockpiling strategies by the government(s) of consuming nation(s) and pricing strategies by a cartel. Ultimate consumers are active, though nonstrategic, players in the game. The paper examines outcomes when discount rates, time horizons, resource constraints, and storage and production costs vary; when consuming nations do not cooperate fully; and when a consuming nation or a cartel can issue threats and promises. Both producers and consumers realize economic benefits from stockpiling in most of the cases that we investigate. Depletable resources are not considered except in an appendix. The net benefits of stockpiling constrained resources are problematical.

Date: 1977
References: Add references at CitEc
Citations: View citations in EconPapers (24)

Downloads: (external link)
http://links.jstor.org/sici?sici=0361-915X%2819772 ... O%3B2-Q&origin=repec full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:rje:bellje:v:8:y:1977:i:spring:p:66-96

Ordering information: This journal article can be ordered from
https://editorialexp ... i-bin/rje_online.cgi

Access Statistics for this article

More articles in Bell Journal of Economics from The RAND Corporation
Bibliographic data for series maintained by ().