Market power reduces equilibrium quantities and distorts production, typically causing welfare losses. However, as Buchanan (1969) noted, market power may mitigate overproduction from negative externalities. This paper examines this in the global oil market, where OPEC's market power affects oil...

The oil shock of 1973 changed everything. It brought the golden age of American and European economic growth to an end; it destabilized Middle Eastern politics; and it set in train processes that led to over one hundred million unexpected – and unwanted – immigrants.