IDEAS home Printed from https://ideas.repec.org/a/spr/eurjdp/v7y2019i1d10.1007_s40070-019-00096-3.html
   My bibliography  Save this article

Assessing the effectiveness of economic sanctions

Author

Listed:
  • Bader Sabtan

    (University of Waterloo)

  • Marc D. Kilgour

    (Wilfrid Laurier University)

  • Keith W. Hipel

    (University of Waterloo)

Abstract

The strength of sanctions can significantly impact the outcome of a dispute. The effectiveness of economic sanctions will be explored within the context of the conflict between Organization of Petroleum Exporting Countries (OPEC) and US shale oil producers in 2014. The outcome was not what OPEC anticipated, perhaps because OPEC misperceived the opponent’s preferences. Sensitivity to sanctions is a major component of a decision maker’s preferences when a dispute, or a negotiation, is modeled within the Graph Model for Conflict Resolution (GMCR). This study uses Inverse GMCR to determine what preference rankings would be required for the conflict to end as OPEC wished. The difference between the original preference ranking and the required rankings reflects the miscalculation of the strength of the economic “squeeze” that OPEC imposed when it flooded the market with oil to reduce the price. OPEC expected this sanction to be strong enough to damage, and perhaps destroy, the shale industry, but shale producers were able to withstand it. The graph model analysis suggests why this conflict ended as it did, and provides guidelines for understanding whether sanctions can be effective in forcing a particular outcome on a dispute.

Suggested Citation

  • Bader Sabtan & Marc D. Kilgour & Keith W. Hipel, 2019. "Assessing the effectiveness of economic sanctions," EURO Journal on Decision Processes, Springer;EURO - The Association of European Operational Research Societies, vol. 7(1), pages 69-82, May.
  • Handle: RePEc:spr:eurjdp:v:7:y:2019:i:1:d:10.1007_s40070-019-00096-3
    DOI: 10.1007/s40070-019-00096-3
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s40070-019-00096-3
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.

    File URL: https://libkey.io/10.1007/s40070-019-00096-3?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Mr. Alberto Behar & Robert A Ritz, 2016. "An Analysis of OPEC’s Strategic Actions, US Shale Growth and the 2014 Oil Price Crash," IMF Working Papers 2016/131, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Rêgo, Leandro Chaves & Silva, Hugo Victor & Rodrigues, Carlos Diego, 2021. "Optimizing the cost of preference manipulation in the graph model for conflict resolution," Applied Mathematics and Computation, Elsevier, vol. 392(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gil-Alana, Luis A. & Dadgar, Yadollah & Nazari, Rouhollah, 2020. "An analysis of the OPEC and non-OPEC position in the World Oil Market: A fractionally integrated approach," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 541(C).
    2. Jong-Hyun Kim & Yong-Gil Lee, 2018. "Learning Curve, Change in Industrial Environment, and Dynamics of Production Activities in Unconventional Energy Resources," Sustainability, MDPI, vol. 10(9), pages 1-11, September.
    3. Yao Axel Ehouman, 2021. "Dependence structure between oil price volatility and sovereign credit risk of oil exporters : Evidence using a Copula Approach," Post-Print hal-03348410, HAL.
    4. Al Rousan, Sahel & Sbia, Rashid & Tas, Bedri Kamil Onur, 2018. "A dynamic network analysis of the world oil market: Analysis of OPEC and non-OPEC members," Energy Economics, Elsevier, vol. 75(C), pages 28-41.
    5. Pål Boug & Ådne Cappelen, 2022. "Did OPEC change its behaviour after the November 2014 meeting?," Empirical Economics, Springer, vol. 62(5), pages 2285-2305, May.
    6. Jong-Hyun Kim & Yong-Gil Lee, 2017. "Analyzing the Learning Path of US Shale Players by Using the Learning Curve Method," Sustainability, MDPI, vol. 9(12), pages 1-8, December.
    7. Zhu, Tianyuan & Balakrishnan, Jaydeep & da Silveira, Giovani J.C., 2020. "Bullwhip effect in the oil and gas supply chain: A multiple-case study," International Journal of Production Economics, Elsevier, vol. 224(C).
    8. David R. Mares, 2022. "Understanding Cartel Viability: Implications for a Latin American Lithium Suppliers Agreement," Energies, MDPI, vol. 15(15), pages 1-26, July.
    9. Foroni, Claudia & Stracca, Livio, 2019. "Much ado about nothing? The shale oil revolution and the global supply curve," Working Paper Series 2309, European Central Bank.
    10. Ehouman, Yao Axel, 2021. "Dependence structure between oil price volatility and sovereign credit risk of oil exporters: Evidence using a copula approach," International Economics, Elsevier, vol. 168(C), pages 76-97.
    11. Claudia Foroni & Livio Stracca, 2023. "The shale oil revolution and the global oil supply curve," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 38(3), pages 370-387, April.
    12. Yao Axel Ehouman, 2020. "Dependence structure between oil price volatility and sovereign credit risk of oil exporters: Evidence using a Copula Approach," EconomiX Working Papers 2020-31, University of Paris Nanterre, EconomiX.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:eurjdp:v:7:y:2019:i:1:d:10.1007_s40070-019-00096-3. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.