A game theory approach to Philippines-OPEC oil situation with a brief analysis to the distribution of oil products to different regions of the Philippines

• Main Author: Liu, Ruthishenel O.
• Format: text
• Language: English
• Published: Animo Repository 2018
• Subjects: Mathematics
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/18570
• Institution: De La Salle University

In this paper, we analyze the various possibilities when it comes to the relationship between OPEC and the Philippines. We use a game theory approach to interpret and suggest what the Philippines can do to have oil stability and to withstand increasing oil prices. Seen as a Prisoner's Dilemma game, we examine the four possible scenarios: OPEC and the Philippines cooperate, OPEC imposes its will, Philippines imposes its will, and lastly, status quo. These discussions are based on the paper, Energy Challenges for Europe - Scenarios of the Importance of Natural Gas Prices from a Game Theory Perspective by Gheorghe Hurduzeu and Maria-Floriana Popescu [27]. We also use data in 2017 to formulate a transportation model involving two oil companies, Shell and Petron, aiming to find an efficient way of distributing oil products all over the country minimizing distance which is assumed to be proportional to cost. The obtained solution suggests transporting gas and diesel from only one refinery to a particular depot.