The Competitive Strategy Analysis Of China's Refined Oil Market Based On Game Theory

With the continuous improvement of marketization degree of China's refinery product market,its competitive landscape has undergone profound changes,oversupply situation will persist in a long term,and a competition pattern dominated by CNPC and Sinopec has formed.In this context,the study on competition strategies in refinery oil market would have important practical significance.On the basis of study on the relevant literatures and analysis of the current situation and trends for supply and demand in refinery oil market,the dissertation explored the market structure from the perspective of market concentration degree and barriers to entry.By combing with Bertrand Model,a duopoly game model for China's refinery oil market was developed,the price evolution was modeled for price gaming between CNPC and Sinopec,and competition strategies were then put forward.Results show that China's refined oil market has a high market concentration dgree and several significant barriers to entry,making it a typical duopoly market.Taking account of bounded rationality,the price adjustment frequency and range from CNPC and Sinopec will affect the price stability in Nash equilibrium,and a lower adjustment frequency and range will form a unique Nash equilibrium.However,with the increase of adjusting frequency,the stability of Nash equilibrium will change,and phenomenon like branch,chaos would then appear and eventually lead to an unpredictable market.Therefore,both sides need to carefully select the price strategy and expand the stable region for equilibrium by reducing costs,etc.,to avoid price competition into a chaotic state.