THE AGENT-BASED MODEL OF REGULATION OF RETAIL PRICES ON THE MARKET OF PETROLEUM PRODUCTS - Polish Journal of Management Studies

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THE AGENT-BASED MODEL OF REGULATION OF RETAIL PRICES ON THE MARKET OF PETROLEUM PRODUCTS

Abstracts > Vol 3

THE AGENT-BASED  MODEL  OF  REGULATION OF RETAIL PRICES  ON THE MARKET OF PETROLEUM PRODUCTS

Galchynsky L., Svydenko A., Veremenko I. *

Abstract:

This article provides model of the retail gasoline market as   multi-agent systems. The main factors, which affecting on the retail price of gasoline were determined. The authors found that using the agent approach, which takes into consideration the  coalitions in the market, in particular, tacit collusion, it is possible to describe the behaviour of players correctly. An description of agent behaviour models and algorithms specific agent were done.


Keywords: petroleum products, market, oligopoly, game theory, agent-based model

Introduction

The role of the oil products market for any national economy is extremely high, the price of fuel affects the nature of the economy in total. Increasing of prices of fuel excites a chain reaction of negative consequences: increasing of prices for commodities,  inflation rising, reduction of firms profitability, especially for power-intensive. Naturally, that the government that cares about the public good, can’t be indifferent to the condition of the oil market and forced to apply the regulatory impact  on the market. The costs of oil account as a component of transport costs, which in turn affect the prices of each goods of consumer’s market. At the same time fuel prices in the internal market are sensitive to fluctuations in crude oil prices  on world markets and a number of other factors. Another important factor, to which the price of fuel in the market is very sensitive, is the exchange rate of dollar to national currency [1].
Characteristic feature of modern oil market is the large number of economic entities, acting independently or in co-operating in terms which are far from the postulates of classical markets where there are laws of equilibrium. Stability of this market  in the short period of time depends on the behaviour of market players, on their pricing strategy. Researchers of oil market in recent years have established the fact that different countries on their national market have one feature of prices dynamics,  so-called asymmetry, because of gasoline markets are often suspected of the existence of cartel agreements on prices[4-6]. Such agreements are illegal in EU countries and other countries, including in Ukraine. So, appears the question of price regulation  on the oil market, taking into account the factor of possible conspiracy.

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Summary

In this paper we’ve presented the agent-based model of price regulation on the oil market. The possibility of some types of models was analyzed for describing the behaviour of the market, in particular the game-theoretic approach. As a result,  we found that none of the models are able to quantitatively describe the behaviour of players in the retail market of oil products. The agent model of the oil market, which take into consideration the coalitions in the market, including secret combinations,  was offered. We describe the basis of this model and algorithms behaviour of the agent. The model was tested on real data in the Kiev region. We determined, that in case of existence in a marketplace the object, which doesn’t enter into a secret  plot, and implements special price policy, in particular the state, the level of asymmetry in price significantly reduced. This situation affirms the possibility of price regulation.


MODEL REGULACJI CEN DETALICZNYCH NA RYNKU PRODUKTÓW NAFTOWYCH BAZUJĄCY NA CZYNNIKACH

Streszczenie:

Artykuł ten przedstawia model rynku detalicznego benzynowych systemów wieloczynnikowych. Określone zostały główne czynniki, które mają wpływ na cenę detaliczną benzyny. Autorzy stwierdzili, że stosując metodę czynników, która uwzględnia koalicje rynkowe, w szczególności zmowy milczenia, możliwe jest poprawnie opisanie zachowania graczy. Wykonane zostały, opis i modele zachowania określonych  algorytmów.



 
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