[eliotho]

And this is what the model price formation assumes, and in fact, the silent mechanism that makes the crisis worse. Reserves silently deplete for each country, and each epoch where they exhaust is when the price rebalancing occurs IN A SUDDEN SPIKE, affecting other nodes that are not even connected to Hormuz, which is one of the conclusions of the paper. Either directly or indirectly all countries feel the pain: the question is who can stand the game of chicken the longer before intervening

[Dylan16807]

If the sudden spike is so bad, why would a country fail to taper their reserves?

[eliotho]

this is an interesting market design question: the point is that tapering would require everyone knowing everyone else's depletion clocks. As they are unknown (sanctioned trade, non-public state figures), the opacity is the game itself (that I called game of chicken in other comments). Surely the main players are trying hard to guess each other's numbers by every mean possible

[toomuchtodo]

The suspense is terrible, I hope it lasts. Great work on the project!

[eliotho]

Thank you! Much appreciated. On the suspense, we are all riding the same train :$