Title :
Cheap talk of supply-demand games in the world oil market
Author :
Liang Lin-lin ; Qi Zhong-ying
Author_Institution :
Sch. of Manage., Harbin Inst. of Technol., Harbin
Abstract :
The skyrocketing of the oil price aroused the attention to the supply-demand relationship of the world oil market. Aiming at the incomplete information between suppliers and consumers, this paper studied the production strategy of the suppliers and the judgment of the consumers of the oil market with a signaling game model to deduce the sufficient and essential conditions of the three kinds of market equilibria---separating equilibrium, pooling equilibrium and hybrid equilibrium, and finally made comparison between the three market efficiencies. The result is that the separating equilibrium is the most efficient Bayesian equilibrium of the above three. So the suppliers will transmit correct signals as long as the cost of cheating is high enough and the most efficient market equilibrium could be achieved.
Keywords :
Bayes methods; game theory; globalisation; petroleum industry; pricing; supply and demand; Bayesian equilibrium; market equilibria; oil price; supply-demand games; supply-demand relationship; world oil market; Bayesian methods; Conference management; Costs; Economic forecasting; Engineering management; Information analysis; Petroleum; Production; Supply and demand; Technology management; Bayesian equilibrium; cheap talk; incomplete information; oil market;
Conference_Titel :
Management Science and Engineering, 2008. ICMSE 2008. 15th Annual Conference Proceedings., International Conference on
Conference_Location :
Long Beach, CA
Print_ISBN :
978-1-4244-2387-3
Electronic_ISBN :
978-1-4244-2388-0
DOI :
10.1109/ICMSE.2008.4669086