RIVALROUS CONSONANCE AND THE POWER STRUCTURE OF OPEC

• Published in: Kyklos (Basel) Vol. 32; no. 4; pp. 695 - 717
• Main Author: Kuenne, Robert E.
• Format: Journal Article
• Language: English
• Published: Oxford, UK Blackwell Publishing Ltd 01.01.1979; Wiley Blackwell; Kyklos Verlag
• Series: Kyklos
• Subjects: Organization of petroleum exporting countries
• ISSN: 0023-5962; 1467-6435
• DOI: 10.1111/j.1467-6435.1979.tb01141.x

SUMMARY At the theoretical level the development of a useful theory of oligopoly depends upon the ability to translate industrial power structure into quantitative form with sufficient mathematical uniqueness to permit incorporation into functions. More practically, understanding the decision processes of the OPEC cartel benefits greatly from an isolation of the pairwise power relations among its members. This paper develops a general technique for the measurement of the combination of rivalry and cooperation that characterizes the relations of oligopolistic industries, and applies it to the derivation of power measures for 11 members of OPEC taken pairwise. It hopes thereby to capture both general and market relationships that underlie the power each member has in decision making for the cartel. In future work these factors will be incorporated in a nonlinear programming model of the pricing policies of the cartel.