Imperfect Cartelization in OPEC

AbstractA model of global oil production is applied to study cartelization by OPEC countries. We define a measure for the degree of cooperation, analogous to the market conduct parameter of Cyert et al. (1973), Geroski et al. (1987), Lofaro (1999), and Symeonidis (2000). This parameter is used to assess the incentives of different OPEC members to collude. We find that heterogeneity in OPEC and the supplies of the non-OPEC fringe create strong incentives against collusion. More specifically, OPEC's supply strategy, although observed to be substantially more restrictive than that of a Cournot–Nash oligopoly, is found to still be more accommodative than that of a perfect cartel. The strategy involves allocating larger than proportionate quotas to smaller and relatively costlier producers, as if to bribe their participation in the cartel. This is in contrast to predictions of the standard cartel model that such producers should be allocated relatively more stringent quotas. Furthermore, we demonstrate that cartel collusion is more likely to be sustained for elastic than for inelastic demand. Since global oil demand is well known to be inelastic, this observation provides another structural explanation for why OPEC behavior is inconsistent with that of a perfect cartel. Our study points to multiple headwinds that limit OPEC's ability to mark up the oil price

Imperfect Cartelization in OPEC

A model of global oil production is applied to study cartelization by OPEC countries. Writing out the shadow price on quota allocations so as to draw correspondence to coefficients of cooperation (Cyert et al. 1973), we examine the incentives that different OPEC members to collude. We find that heterogeneity in OPEC and the supplies of the non-OPEC fringe create strong incentives against OPEC cooperation. OPEC’s optimal supply strategy although observed to be substantially more restrictive than that of a Cournot-Nash oligopoly, is found to still be more accommodative than that of a perfect cartel. The strategy involves allocating larger than proportionate quotas to smaller and relatively costlier producers as if to bribe their participation in the cartel. This is contrary to predictions of the standard cartel model that such producers should be allocated relatively more stringent quotas. Furthermore, we find that cartel collusion is likely to be sustained for elastic than inelastic demand. Since global oil demand is well known to be inelastic, this observation provides another structural explanation for why OPEC behavior is inconsistent with that of a perfect cartel. Our study points to multiple headwinds that limit OPECs ability to raise long-run global oil prices

Systolic realization of multirate digital filters

published_or_final_versionElectrical EngineeringMasterMaster of Philosoph

How does economic theory explain the Hubbert peak oil model?

Abstract: The aim of this paper is to provide an economic foundation for bell shaped oil extraction trajectories, consistent with Hubbert's peak oil model. There are several reasons why it is important to get insight into the economic foundations of peak oil. As production decisions are expected to depend on economic factors, a better comprehension of the economic foundations of oil extraction behaviour is fundamental to predict production and price over in the coming years. The investigation made in this paper helps us to get a better understanding of the different mechanisms that may be at work in the case of OPEC and non-OPEC producers. We show that profitability is the main driver behind production plans. Changes in profitability due to divergent trajectories between costs and oil price may give rise to a Hubbert production curve. For this result we do not need to introduce a demand or an exploration effect as is generally assumed in the literature

Biofuel Mandating and the Green Paradox

The theory on the green paradox has focused primarily on the consumption of a clean substitute produced using a static technology. In reality, we observe the gradual accumulation of the clean substitute’s capacity, suggesting that supply decisions for the clean substitute and finite carbon resource should both be treated as dynamic. This paper shows that when climate policy is preannounced, and with simultaneous consumption of a finite carbon resource and a clean substitute, myopia in the supply of the latter leads to the green paradox. When clean substitute producers can accumulate capacity and are forward looking, the green paradox may or may not arise, however. In this setting, its occurrence depends on both the size of the discount rate and the remaining stock of carbon resource. These and other drivers of the green paradox are investigated in a multi-producer game-theoretic model calibrated to real-world global oil market data. The timing of mandating policy is shown to be the single most important variable for mitigating the green paradox. Moreover, for EU-2020 and US-2022 style biofuel mandating targets, a rather robust 0.3% decline in production is observed during the premandate phase, suggesting that concerns over the green paradox may be seriously overstated

(Bio-)Fuel mandating and the green paradox

Well-intended preannounced carbon mitigation policies can lead to adverse impacts such as the green paradox. This paper examines conditions impacting the prevalence of this phenomenon, when suppliers of carbon-free energy, similarly to carbon suppliers, can anticipate the implementation of preannounced carbon regulation. Neglecting the interim build-up of carbon-free capacity that responds to preannounced climate policies over-estimates the green paradox. For EU-2020 and US-2022 calibrated biofuel mandating targets, simulations point to a robust 0.4–0.6% decline in premandate global crude oil supply, suggesting that concerns over the green paradox may have been overstated. Mandate designs to mitigate the green paradox are also examined. Initially mild targets that are complemented by increasingly stringent ones are more effective at curbing the green paradox than ambitious but delayed targets

Necrotising myofasciitis as the initial presentation of a vesico-urethral anastomotic leak after radical prostatectomy

Necrotising soft tissue infections present as acute or sub-acute necrotising variants of cellulitis, fasciitis or myositis. Fulminant tissue destruction and systemic toxicity with a mortality rate of 14–59% is common. Risk factors for NF include diabetes, recent surgery, peripheral vascular disease, alcohol abuse and immunosuppression. Learning points are as follows: (1) In at-risk patients, VUAL can lead to necrotising myofasciitis, therefore, a low threshold for diagnosing NF is recommended. (2) In patients with multiple co-morbidities, a more conservative approach in the management of any VUAL, including urine cultures at IDC removal should be considered. (3) Dorsal venous complex haemorrhage can present significant intra-operative challenges during RRP

Microsatellites reveal divergence in population genetic diversity, and structure of osyris lanceolata (santalaceae) in Uganda and Kenya

Abstract Background Osyris lanceolata (Hochst. & Steud.) (Santalaceae) is a multipurpose plant highly valued culturally and economically in Africa. However, O. lanceolata populations have rapidly dwindled in East Africa due to overexploitation and this is believed to cause further consequences on the species’ genetic diversity and structure within the region. Information regarding a species’ genetic diversity and structure is necessary for conservation but this is currently lacking for O. lanceolata in Uganda and Kenya. Lack of adequate scientific data hinders conservation efforts hence threatening the species survival and livelihoods. This study investigated patterns in genetic diversity and structure of O. lanceolata in Uganda and Kenya. Ten polymorphic microsatellite loci were used to genotype 210 individuals: 96 from Ugandan and 114 from Kenyan populations. Results All populations were highly polymorphic (80–100% polymorphism). A genetic differentiation was found between Kenyan and Ugandan populations. The highest genetic differentiation was among individuals and the least among populations. The Kenyan populations showed higher genetic diversity than Ugandan populations. The Ugandan populations showed more marker deviations from Hardy-Weinberg equilibrium and inbreeding coefficient. Two populations showed evidence of going through a recent bottleneck. There was significant genetic differentiation and structuring at higher K values into larger clusters and observed admixture between populations. The populations were significantly isolated by altitude as opposed to distance and climatic variables. Main barriers were associated with altitude differences. The data supports the idea of long-distance gene-flow between high altitude populations in both countries. Conclusion The divergence in genetic structure suggests unrecognised taxonomic units within O. lanceolata which are characteristic to lower altitudes and higher altitudes including most Kenyan populations with divergent evolutionary patterns. Geographical barriers and environmental gradients could have influenced this genetic divergence, and such patterns may escalate the species microevolutionary processes into full allopatric speciation. Further investigations into the species’ genetic admixture and emerging taxonomic units are necessary to guide conservation strategies in the region