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Abstract

Mineral markets, in spite of many common features with other goods markets, are distinctive. Their functioning sometimes deviates from the rules of the free market. This feature results from the specificity of acquiring the good being an object of trade. In general, changes in the supply of strategic raw materials are indicated earlier (characterized by a lengthy investment cycle from deposit reconnaissance to mining development), develop slowly, andare inelastic. Demand for common mineral raw materials often has a clear and economic character. However, mineral markets as well as markets of other goods have a common feature - the fact that both are a place where an incessant game is being played. In general, two types of strategic behaviours are distinguished: competition or cooperation. This paper recalls an existing model known as the oil market game. Based on a three-entity market of aggregate producers, an attempt has been made to model entrepreneurs' behaviour. The analysis applies n-person game theory. Game theory enables the evaluation of diverse potential coalitions forming. Possible strategies of activity coming from the prospect of cooperation (or its omission) are presented. Expected payoffs are estimated for possible alliances. Proposals for the division of the payoffs among the participants forming the coalition are also suggested.

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Authors and Affiliations

Mariusz Krzak

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