TY - JOUR

T1 - A nonparametric approach to evolutionary oligopoly games

T2 - An application to the crude oil industry

AU - Markazi Moghadam, Hamed

N1 - Funding Information: The author is grateful to Christopher P. Chambers, Vincent P. Crawford, Herbert Dawid, Jan Heufer, Wolfgang Leininger, Lars Metzger, Wolfram F. Richter, Marciano Siniscalchi, James L. Smith, Allard van der Made, the seminar participants at TU Dortmund University and Universitat de les Illes Baleares, the conference participants at the 49th annual conference of the Canadian Economic Association, the Royal Economic Society PhD Meeting in London, the 5th World Congress of the Game Theory Society in Maastricht, the XXXIV Jornadas de Economia Industrial, and EARIE 2019. I particularly thank two anonymous reviewers and the editor for their valuable comments that helped substantially improve this manuscript. Financial support from TU Dortmund University and the Ruhr Graduate School in Economics is also gratefully acknowledged. This paper is a development of part of the doctoral thesis by Moghadam (2017) discussed at TU Dortmund University, as a member of the Ruhr Graduate School in Economics.

PY - 2021/8

Y1 - 2021/8

N2 - In this paper, I use a non-parametric revealed preference approach to investigate the empirical content of an oligopoly, with a relative maximization setup wherein players have different cost functions to produce a homogeneous good. Moreover, I present an empirical application to the crude oil market and its main producers and compare the rejection rates of the standard Cournot, the perfect competition, and relative maximizing hypotheses. The results show that the relative maximization model better explains the behavior of the major oil producers than the best-reply and price-taking models.

AB - In this paper, I use a non-parametric revealed preference approach to investigate the empirical content of an oligopoly, with a relative maximization setup wherein players have different cost functions to produce a homogeneous good. Moreover, I present an empirical application to the crude oil market and its main producers and compare the rejection rates of the standard Cournot, the perfect competition, and relative maximizing hypotheses. The results show that the relative maximization model better explains the behavior of the major oil producers than the best-reply and price-taking models.

KW - Nonparametric

KW - Oil market

KW - Relative payoff maximization

KW - Revealed preference test

UR - http://www.scopus.com/inward/record.url?scp=85106942882&partnerID=8YFLogxK

U2 - 10.1016/j.econmod.2021.105547

DO - 10.1016/j.econmod.2021.105547

M3 - Article

AN - SCOPUS:85106942882

VL - 101

JO - Economic Modelling

JF - Economic Modelling

SN - 0264-9993

M1 - 105547

ER -