CEU Electronic Theses and Dissertations, 2008
| Author | Yusifov, Anar Ilham |
|---|---|
| Title | Oil Refinery Maintenance as a Strategic Decision |
| Summary | In this thesis I construct a model of interaction of refinery firms which decide on their maintenance and production levels. Both of these choices are considered strategic variables in my model as they affect the probability of failure of refinery machinery. Using game theory tools and simulations, I first analyze the competition of refineries in static one-shot game and identify their strategies that lead to a unique equilibrium outcome. Further, to improve the assumptions on maintenance and production choices, I model a simple 2-period dynamic game which is later extended with an introduction of uncertainty. Dynamic model allows answering the question of whether it is beneficial to take up maintenance at all. In each model simulations are used to simplify the derivations and uncover the dependence of results on parameter values. The results of static model suggest that refineries should produce at a low level with a less need for maintenance. Dynamic model suggests that it is better to skip the production in the first period and take up maintenance instead. However, after introducing uncertainty the results of dynamic model depend on beliefs of refinery firms about future demand. |
| Supervisor | Baniak, Andrzej Zbigniew |
| Department | Economics MA |
| Full text | https://www.etd.ceu.edu/2008/yusifov_anar.pdf |
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