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| Author: | Wirl, F. |
| Title: | Dynamic demand and optimal OPEC pricing. |
| Journal: | Energy Economics
1990 : JUL, VOL. 12:3, p. 174-176 |
| Index terms: | OIL PRICES OPEC DEMAND FUNCTIONS |
| Language: | eng |
| Abstract: | Fromholzer's and Wirl's analysis provide a clear cut criterion for when a monopolist should employ a stable or when a volatile price strategy. This criterion is applied to the demand for OPEC oil. It is concluded that the shape of the equilibrium demand function determines whether a price is stable or volatile. A concave demand relation induces a smooth, and a convex relation leads to a volatile strategy. However, the simple empirical tests in the paper are inconclusive; therefore, a more detailed empirical analysis of all the important aspects are required to understand past and future oil price policies. |
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