OPEC dynamics interpreted through Nash Equilibrium & Stackleberg Game Theory.

1. OPEC ROLE IN GLOBAL OIL MARKET STRUCTURE Presented by: JOYDEEP MUKHERJEE (20081020) MOHIT RAJ (20081030) MRUGESH BRAHMBHATT (20081031) REJO MATHEW (20081042) VIKRAM DESHMUKH (20081057)

2. Factors affecting OPEC Pricing Model + OPEC behaviour is not constant and can exhibit variation in conduct with important implications on price dynamics in the oil market + OPEC’s influence is asymmetrical depending on whether it is responding to rising or falling global oil demand + The shift to the futures markets for price determination has introduced a large number of players and the large variety of participants has complicated the process of decision-making within OPEC

4. NASH EQUILIBRIUM SAUDI ARABIA REST OF THE PLAYERS (OPEC) Fair Cheat All figures are in million Dominant Strategy

7. STACKLEBERG GAME IMPORTING COUNTRY OPEC OPEC Invest in Renewable sources Do not invest in Renewable sources Low Low Maintain Maintain (1398, 4193) (0, 14910) (0, 5591.25) (11182, 3727) 0.25*75*74.55 =1398 0.75*75*74.55 = 4193 0.75*200*74.55= 11182 0.25*200*74.55= 3727 75* 74.55 = 5591.25 200*74.55 = 14910 (All figures are in multiples of 10^8)