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Frugals, Militants and the Oil Market

  • Etienne Billette de Villemeur
  • Pierre-Olivier PineauEmail author
Chapter
Part of the International Series in Operations Research & Management Science book series (ISOR, volume 280)

Abstract

The oil market has often been modeled as an oligopoly where the strategic players are producers. With climate change, a new sort of game appeared, where environmental militants play a significant role by opposing some projects, to contain oil production. At the same time, consumers continue to use increasing amounts of oil, independently of oil price fluctuations. Should we oppose oil projects, reduce demand or both? We investigate in this paper the double prisoner’s dilemma in which individuals find themselves, with respect to oil consumption and their environmental stance towards the oil industry. We find that the collective outcome of such game is clearly better when a frugal behaviour is adopted, without being militant. The Nash equilibrium, resulting from the individual strategies, leads by contrast to the worst possible outcome: high prices, high consumption and high environmental (negative) impact. An effective environmental action should avoid opposing oil supply sources (a costly militant act) and help consumers becoming more frugal.

Keywords

Prisoner’s dilemma Oil production Militancy Frugality 

Notes

Acknowledgements

We want to acknowledge the useful comments of two referees.

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Copyright information

© Springer Nature Switzerland AG 2020

Authors and Affiliations

  • Etienne Billette de Villemeur
    • 1
  • Pierre-Olivier Pineau
    • 2
    Email author
  1. 1.Université de LilleLilleFrance
  2. 2.Chair in Energy Sector ManagementHEC Montréal Energy Sector ManagementMontréalCanada

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