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Supply Disruptions and Regional Price Effects in a Spatial Oligopoly—An Application to the Global Gas Market
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Titel: |
Supply Disruptions and Regional Price Effects in a Spatial Oligopoly—An Application to the Global Gas Market |
In: | Review of International Economics, 22, 2014, 5, S. 944-975 |
veröffentlicht: |
Wiley
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Umfang: | 944-975 |
ISSN: |
1467-9396 0965-7576 |
DOI: | 10.1111/roie.12138 |
Zusammenfassung: | <jats:title>Abstract</jats:title><jats:p>Supply shocks in the global gas market may affect countries differently, as the market is regionally interlinked but not perfectly integrated. Additionally, high supply‐side concentration may expose countries to market power in different ways. To evaluate the strategic position of importing countries with regard to gas supplies, we disentangle the import price into different components and characterize each component as price increasing or price decreasing. Because of the complexity of the interrelations in the global gas market, we use an equilibrium model programmed as a mixed complementarity problem (<jats:styled-content style="fixed-case">MCP</jats:styled-content>) and simulate the blockage of liquefied natural gas (<jats:styled-content style="fixed-case">LNG</jats:styled-content>) flows through the <jats:styled-content style="fixed-case">S</jats:styled-content>trait of <jats:styled-content style="fixed-case">H</jats:styled-content>ormuz. This enables us to account for the oligopolistic nature and the asymmetry of the gas supply. We find that <jats:styled-content style="fixed-case">J</jats:styled-content>apan faces the most severe price increases, as the Japanese gas demand completely relies on <jats:styled-content style="fixed-case">LNG</jats:styled-content> supply. In contrast, European countries such as the <jats:styled-content style="fixed-case">UK</jats:styled-content> benefit from good interconnection to the continental pipeline system and domestic price taking production, both of which help to mitigate an increase in physical costs of supply as well as in the exercise of market power.</jats:p> |
Format: | E-Article |
Quelle: | Wiley (CrossRef) |
Sprache: | Englisch |