Numerical calculation of an asymmetric supply function equilibrium with capacity constraints
نویسندگان
چکیده
منابع مشابه
Numerical calculation of an asymmetric supply function equilibrium with capacity constraints
Producers submit committed supply functions to a procurement auction, e.g. an electricity auction, before the uncertain demand has been realized. In the Supply Function Equilibrium (SFE), every firm chooses the bid maximizing his expected profit given the bids of the competitors. In case of asymmetric producers with general cost functions, previous work has shown that it is very difficult to fi...
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Consider a market where producers submit supply functions to a procurement auction — e.g. an electric power auction — under uncertainty, before demand has been realized. In the Supply Function Equilibrium (SFE), every firm commits to the supply function maximizing his expected profit given the supply functions of the competitors. The presence of multiple equilibria is one basic weakness of SFE....
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In a real-time electric power auction, the bids of producers consist of committed supply as a function of price. The bids are submitted under uncertainty, before the demand by the Independent System Operator has been realized. In the Supply Function Equilibrium (SFE), every producer chooses the supply function maximizing his expected profit given his residual demand. I consider a uniform-price ...
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The concept of a supply function equilibrium (SFE) has been widely used to model generators’ bidding behavior and market power issues in wholesale electricity markets. Observers of electricity markets have noted how generation capacity constraints may contribute to market power of generation firms. If a generation firm’s rivals are capacity constrained then the firm may be pivotal; that is, the...
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In this paper we consider a supply function model of an electricity market where strategic firms have capacity constraints. We show that if firms have heterogeneous cost functions and capacity constraints then the differential equation approach to finding the equilibrium supply function may not be effective by itself because it produces supply functions that fail to be non-decreasing. Even when...
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ژورنال
عنوان ژورنال: European Journal of Operational Research
سال: 2009
ISSN: 0377-2217
DOI: 10.1016/j.ejor.2008.10.029