Energy and market power: an alternative approach to the economics of oil

Abstract

After recalling the existence of two competitive approaches to economics, the "subjective" and the "objective" one, and the main stylized facts about the energy sector,the paper critically examines different versions of "mainstream" economics of oil and sketches an alternative approach, based on the notion of "trilateral oligopoly." Some implications of this approach (dynamic rather than static substitution, an environmental policy based not on fears of scarcity but on the notion of sustainable development, the need for antitrust intervention for stabilizing oil prices) are then examined.

Keywords:

• CARBON TAXES
• DYNAMIC SUBSTITUTION
• ENERGY
• ENVIRONMENT
• OIL.