The existence of several different degrees of restructuring, uneven dynamics, the transition from a natural monopoly to a competitive market with new strategic and economic opportunities are among the defining features of the natural gas market that transform it into an important pillar of the economy. Since in such an oligopolistic market, the actors must define a strategic and competitive advantage with positive effects on the competitive environment. In this context, game theory can be an essential tool for the decision-making process depending on the dynamics of asymmetric information. The main purposes of the paper are to analyze the degree of European gas market concentration and to determine, using a game theory model, the production, the price and the profits equilibrium levels for the main producers. The variables used in the analysis are natural gas countries’ productions and exports, price and market shares for 1992-2019 period for the main European producers. In order to determine the European gas market concentration, we use the Hirschman- Herfindahl concentration index. This index indicates the existence of an oligopolistic market with Russia, the United Kingdom and Norway in dominant positions. Using a quantityoriented Cournot model, we determine the equilibrium gas price and quantities and we show the fact that these are significantly different from the average values of the reference period only for Russia due to its dominant position on this market. Our analysis highlights Russian’s dominant position in the European gas market and suggests its replacement by other suppliers.
Loading....