A STUDY ON GLOBAL COOPERATION STRATEGY IN OIL INDUSTRY BASED ON THE GAME THEORY

Light-duty vehicles consume over 21 million barrels of oil per day. Recent studies, however, have predicted the imminent oil age end. In addition, environmental restrictions point to ethanol as strong candidate to replace gasoline. On the other hand, the expected light-duty vehicles' worldwide growth and limited capacity for ethanol production suggest that total substitution of gasoline is not feasible in the short to medium-term. Nonetheless, 30% ethanol to gasoline blend could increase the performance of internal combustion engines, decrease the emission of greenhouse gases and alters the oil reserves depletion rate. In this study the benefits of using ethanol as a complement to base gasoline and its effects on the world's conventional oil reserves is analyzed. Finally, based on game theory, the transition process to a biomass age could focus on cooperation and compromise strategies in pursuing optimal results for both oil and ethanol industries.