Unique supply function equilibrium with capacity constraints
نویسندگان
چکیده
منابع مشابه
Unique Supply Function Equilibrium with Capacity Constraints
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....
متن کاملNumerical 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...
متن کاملSupply function equilibria with capacity constraints and pivotal suppliers
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...
متن کاملPWP-089 Capacity Constrained Supply Function Equilibrium Models of Electricity Markets: Stability, Non- decreasing constraints, and Function Space Iterations
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...
متن کاملCoalition - Proof Supply Function Equilibria under Capacity Constraints
Whereas in the absence of capacity constraints the Cournot outcome is the unique coalition-proof supply function equilibrium outcome, the presence of capacity constraints may enlarge the set of equilibrium outcomes. Interestingly, if capacities are sufficiently asymmetric the new equilibrium prices are below the Cournot price. These results have important implications for merger and privatizati...
متن کاملذخیره در منابع من
با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید
ژورنال
عنوان ژورنال: Energy Economics
سال: 2008
ISSN: 0140-9883
DOI: 10.1016/j.eneco.2006.10.005