| ID | 111336 |
| Title Proper | Modified Cournot model of the natural gas market in the European Union |
| Other Title Information | mixed-motives delegation in a politicized environment |
| Language | ENG |
| Author | Jansen, Thijs ; Lier, Arie van ; Witteloostuijn, Arjen van ; Ochssee, Tim Boon von |
| Publication | 2012. |
| Summary / Abstract (Note) | With Gazprom gaining prominence as the major supplier of natural gas in the European Union, the European gas market becomes more politicized. We assume that Gazprom's interest as a state monopolist is not only to maximize profit, but also to seek market power, presumably because this contributes to the geopolitical power of Russia at large. We introduce a modeling tool, so-called strategic delegation games, to analyze the implications of Gazprom's operation in the EU. By way of illustration, we model the case where Gazprom competes against two profit-maximizing rivals: Algerian Sonatrach and Norwegian Statoil. We prove that if Gazprom serves any of a comprehensive type of nonprofit objectives, the outcome is beneficial for the EU's consumers, as Gazprom's behavior shifts volumes up and brings prices down. |
| `In' analytical Note | Energy Policy Vol. 41; Feb 2012: p.280-285 |
| Journal Source | Energy Policy Vol. 41; Feb 2012: p.280-285 |
| Key Words | Natural Gas Market ; Cournot Duopoly ; Nonprofit Incentives |