Abstract
The theory of exhaustible resources is modified to take account of the industrial organization of the world oil industry. The oil cartel is viewed as unified enterprise, engaging in a non-cooperative game against firms in the non-cartel sector. Each of these firms in assumed to own an equal chare of the sector's oil; none, however, owns as much as the cartel. The Nash-Cournot equilibrium is examined. As teh number of non-cartel firms increases, they behave like competitive prices takers. The equilibrium converges to the standard "dominant firm model", adapted for exhaustible resources.
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