Testing the Hypothesis of Collusive Behavior Among OPEC Members

This paper presents a test to discriminate among collusive and competitive behavior by producers of exhaustible resources. In contrast to previous studies (Griffin, 1985; Jones, 1990), which are based on static models, our approach is based on of the dynamic implications of the optimization problem faced by a competitive producer. We use this framework to test the hypothesis of collusive behavior within OPEC between 1983 and 1991. The existence of future markets allows us to sidestep the difficult issues related to the estimation of future prices and demand