A Dynamic Nash Game Model of Oil Market Disruption and Strategic Stockpiling

In this paper we present and analyze a Nash dynamic game model for investigating public and private sector oil inventory policies in unstable world oil markets. Conceptual results about the model include simple, verifiable conditions for uniqueness and stability of solutions, along with characteriza...

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Bibliographic Details
Published in:Operations research 1989-11, Vol.37 (6), p.958-971
Main Authors: Murphy, Frederic H, Toman, Michael A, Weiss, Howard J
Format: Article
Language:English
Subjects:
Applied sciences
Arbitrage
economics: energy, world oil markets
Energy
Energy economics
Energy policy
Exact sciences and technology
games/group decisions: stochastic games of strategic inventories
General, economic and professional studies
Imports
Market prices
Methodology
Methodology. Modelling
Nash equilibrium
Oil imports
Oil prices
Supply
Tariffs
Uniqueness
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Summary:In this paper we present and analyze a Nash dynamic game model for investigating public and private sector oil inventory policies in unstable world oil markets. Conceptual results about the model include simple, verifiable conditions for uniqueness and stability of solutions, along with characterizations of optimal policies. We also present results and discuss computational issues that arise in determining subgame perfect infinite-horizon equilibria, using a steady-state policy iteration approach.
ISSN:0030-364X
1526-5463
DOI:10.1287/opre.37.6.958