A modified Cournot model of the natural gas market in the European Union: Mixed-motives delegation in a politicized environment

B-Tier
Journal: Energy Policy
Year: 2012
Volume: 41
Issue: C
Pages: 280-285

Authors (4)

Jansen, Thijs (not in RePEc) van Lier, Arie (not in RePEc) van Witteloostuijn, Arjen (not in RePEc) Boon von Ochssée, Tim (not in RePEc)

Score contribution per author:

0.503 = (α=2.01 / 4 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

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.

Technical Details

RePEc Handle
repec:eee:enepol:v:41:y:2012:i:c:p:280-285
Journal Field
Energy
Author Count
4
Added to Database
2026-01-25