International Journal For Multidisciplinary Research

E-ISSN: 2582-2160     Impact Factor: 9.24

A Widely Indexed Open Access Peer Reviewed Multidisciplinary Bi-monthly Scholarly International Journal

Call for Paper Volume 7, Issue 3 (May-June 2025) Submit your research before last 3 days of June to publish your research paper in the issue of May-June.

OPECONOMICS: How do cooperative and non-cooperative game theory models explain cartel formation and price fixing strategies in the global oil market?

Author(s) Mr. Shreyas Shah
Country India
Abstract Over the years, oil has become a significant source of geopolitical conflict.The present work analyzed the behaviour of member nations of the OPEC cartel and their economic interactions with nations both within and outside the cartel. We will see how game theory models such as repeated Nash equilibria, explain activities such as collusion, cheating within a cartel, and price wars in the global oil market. I take a quantitative approach in designing most of these payoff matrices to show how revenue maximizing actions from the players brings widespread consequences to citizens across the globe who are dependent on oil for a multiplicity of uses. This real world analysis brings to the forefront the very reasons why a mostly ineffective cartel such as OPEC still exists, and what shortcomings of theirs keeps them from meeting all of their set goals while being at odds with the values of the free market.
Keywords Game theory, cartels, OPEC, oil market, price fixing
Field Sociology > Economics
Published In Volume 7, Issue 3, May-June 2025
Published On 2025-05-07
DOI https://doi.org/10.36948/ijfmr.2025.v07i03.44136
Short DOI https://doi.org/g9hsmc

Share this