Evolutionary Game Theory Approach to Technology Development of Oil and Gas Equipment Manufacturing Industry: The Case of the Ten Major Commodity Groups’ Project of the Petroleum Industry

Document Type : Research Paper

Authors

1 PhD Candidate at Department of Management, Faculty of Economic & Progress Engineering, Iran University of Science and Technology, Tehran, Iran

2 Faculty Member at Department of Industrial Engineering, Iran University of Science and Technology, Tehran, Iran

3 Faculty Member at Department of Management, Faculty of Economic & Progress Engineering, Iran University of Science and Technology, Tehran, Iran

Abstract

Technology development, especially in petroleum industries, is one of the most important ways of economic development in oil-rich countries. However, despite such challenges as structural economic problems, the issue of moral hazards, and the conflict of interests, government policies are crucial. This study analyzed the long-term behavior of the government and the private sector as two main actors using the evolutionary game theory and solved their strategies by replicator dynamic equations. Finally, based on a real-world case in Iran, a numerical study was performed to better understand the characteristics of the game model under realistic conditions. The outputs indicate that the main approach of the government, with minimal incentive mechanisms, should be legal monitoring. Sensitivity analyses on some key parameters show that the important factor in project implementation is attention to the private sector’s revenues and expenditures, and the government’s revenues and expenditures have little effect on the outputs and behavior change.

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References

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Interdisciplinary Journal of Management Studies (Formerly known as Iranian Journal of Management Studies)
Volume 15, Issue 2
April 2022
Pages 365-380

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