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1930 1950 1970 1990

1930 1950 1970 1990

Figure 1.9 Prognostication of the behavior of the oil market share up to 1990 using only observed data from before 1935. The results are surprisingly accurate and predict the peak that actually occurred in the 1960s. This is totally unrelated to the OPEC crisis in the early 1970s.

Figure 1.9 Prognostication of the behavior of the oil market share up to 1990 using only observed data from before 1935. The results are surprisingly accurate and predict the peak that actually occurred in the 1960s. This is totally unrelated to the OPEC crisis in the early 1970s.

Peterka argues that any scientific forecasting must be based on certain a priori assumptions. In the case being discussed here, a fundamental assumption is that there be no external infusion of capital once the

Figure 1.10 The regular and predictable behavior of the market penetration function for coal and gas used by Marchetti breaks down if modern data are added to his graph of Figure 1.8.

technology has established itself. This is self evident—if during the penetration period, a substantial increase in capital becomes available, this will alter the rate of penetration, even though it may not increase the profitability of the enterprise. It would be of great value if it were possible to estimate how much it would cost to accelerate the penetration by a given amount. Unfortunately, this is not yet possible. The assumption above implies that when a technology starts to penetrate the market, it must already be well developed and its degree of maturity determines the eventual penetration rate. Thus, "the magnitude of the original external investment actually determines the initial conditions for the model" (Peterka, 1977).

The market penetration rules discussed in this subsection provide a powerful tool for planning, but must be used with caution and with close attention to possible violations of implicit assumptions.

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