Incentives and coordination in vertically related energy markets
نویسندگان
چکیده
We present an agent-based model of a multi-tier energy market. We show how reward interdependence between strategic business units within a vertically integrated firm can increase its profits in oligopolistic energy markets. The effects are shown to be distinct from those of the raising rivals’ costs model. In our case, higher prices relate to the nature of energy markets, which facilitate the emergence of financial netback effects. © 2008 Elsevier B.V. All rights reserved. JEL classification: C63; L22; L97
منابع مشابه
Optimal Scheduling of Coordinated Wind-Pumped Storage-Thermal System Considering Environmental Emission Based on GA Based Heuristic Optimization Algorithm
The integration of renewable wind and pumped storage with thermal power generation allows for dispatch of wind energy by generation companies (GENCOs) interested in participation in energy and ancillary services markets. However, to realize the maximum economic profit, optimal coordination and accounting for reduction in cost for environmental emission is necessary. The goal of this study is to...
متن کاملThree-Part Auctions versus Self-Commitment in Day-ahead Electricity Markets
We examine the economic consequences of a bid-based security-constrained centralized unit commitment paradigm based on three-part offers, which is the prevalent day-ahead market-clearing mechanism in restructured electricity markets in the United States. We then compare this approach with an energy-only auction with self-commitment (such as in Australia) addressing efficiency and pricing as wel...
متن کاملThe Incentives for Vertical Acquisitions and Integration
We examine the incentives for firms to vertically integrate through acquisitions and production. We develop a new firm-specific measure of vertical integration using 10-K text to identify the extent a firm’s products span vertically related product markets. We find that firms in high R&D industries are less likely to vertically integrate or become targets in vertical acquisitions, and are more ...
متن کاملCoordination in the Presence of Asset Markets
We explore the relationship between outcomes in a coordination game and a pre-play asset market in which values are determined by outcomes in the subsequent coordination game. Across two experiments, we vary the payoffs from the market relative to the game, the degree of interdependence in the game, and whether traders’ asset payoffs are dependent on outcomes in their own or another game. Marke...
متن کاملResilience Enhancement of Active Distribution Networks Via Mobile Energy Storage Systems and Protection Coordination Consideration
Owing to the portability and flexibility of mobile energy storage systems (MESSs), they seem to be a promising solution to improve the resilience of the distribution system (DS). So, this paper presents a rolling optimization mechanism for dispatching MESSs and other resources in microgrids in case of a natural disaster occurrence. The proposed mechanism aims to minimize the total system cost b...
متن کامل