This paper presents an oil price cartel model. The aggregate reaction functions for non-cartel producers and for substitute suppliers are included. The former group acts as a price-taker, while the latter expects oil prices in production of its non-oil energy resources. This expectation about prices affects a cartel’s oil demand and, thus, gives intertemporal price elasticities It turns out that if these elasticities are positive, Hotelling’s rule does not apply to a cartelized market in which a cartel behaves as a price-maker.
Ahmadian, M. (1994). Cartelized Oil Market with Alternative Energy Supply. Iranian Economic Review, 1(1), 32-43. https://doi.org/10.22059/ier.1994.30919
MLA
Ahmadian, M. "Cartelized Oil Market with Alternative Energy Supply", Iranian Economic Review, 1, 1, 1994, 32-43. doi: 10.22059/ier.1994.30919
HARVARD
Ahmadian M. (1994). 'Cartelized Oil Market with Alternative Energy Supply', Iranian Economic Review, 1(1), pp. 32-43. doi: 10.22059/ier.1994.30919
CHICAGO
M. Ahmadian, "Cartelized Oil Market with Alternative Energy Supply," Iranian Economic Review, 1 1 (1994): 32-43, doi: 10.22059/ier.1994.30919
VANCOUVER
Ahmadian M. Cartelized Oil Market with Alternative Energy Supply. IER. 1994;1(1):32-43. doi: 10.22059/ier.1994.30919
