The Open Fuels & Energy Science Journal

2014, 7 : 69-72
Published online 2014 November 26. DOI: 10.2174/1876973X01407010069
Publisher ID: TOEFJ-7-69

Is There an Optimal Strategic Oil Reserve for Each Country? A Study Based on the Game Theory

Junan Yang and Rong-Gang Cong
Centre for Environmental and Climate Research (CEC), Lund University, Lund S-22362, Sweden.

ABSTRACT

In generally, there is a phenomenon of “free rider” in the establishment of national oil reserves for different countries, which means that they have the tendency of underestimating the strategic oil reserves. This paper attempts to explain this phenomenon from the perspective of non-cooperative game theory. It also analyzes the establishment of strategic oil reserve among different countries based on the coalition game theory and presents the core solution for it. The results show that based on a certain constraint mechanism, it is feasible for different countries to establish their own suitable strategic oil reserves in theory and practice.

Keywords:

Coalition game, cooperative strategic reserve, core solution, game theory.