in this paper, the concept of conjectural variation (cv) is used to specify optimal generation decision for generation companies (gencos). the conjecture of genco is defined as its belief or expectation about the reaction of rivals to change of its output. using cv method, each genco has to learn and estimate strategic behaviors of other competitors from available historical market operation da...

This article examines "consistent" conjectural variations in an oligopoly model with a homogeneous product. A conjectural variation is consistent if it is equivalent to the optimal response of the otherfirms at the equilibrium defined by that conjecture. When the number of firms is fixed, we find that competitive behavior is consistent when marginal costs are constant, but that when marginal co...

This paper proposes a procedure to incorporate the conjectural variation approach in Computable General Equilibrium (CGE) analysis such that the strategic interaction among rival firms in international markets can be modelled. It shows how to calibrate the conjectured reactions of rival domestic and foreign firms. It also shows that the approach suggested by Harrison, Rutherford and Tarr (hence...

The paper adopts the Conjectural Variation model for investigating firms’ strategic behaviors in the wholesale electricity market. The aim of the proposed approach is providing market actors with a tool able to simulate the oligopolistic market models. The tool, utilized by a Generating Company (GenCo), permits to foresee the rivals’ behaviors and builds the suitable supply bid curve for its ow...

In actual electricity market, which operates repeatedly on the basis of one hour or half hour, each firm might learn or estimate other competitors’ strategic behaviors from available historical market operation data, and rationally aims at its maximum profit in the repeated biddings. A conjectural variation based learning method is proposed in this paper for generation firm to improve its strat...

A central part of the ‘‘new empirical industrial organization’’ has been the study of market power in homogenous-product industries. This paper discusses extension of these methods to differentiated-products industries. The requirements for identification of conjectural variation parameters are shown to be hard to satisfy in practice. An alternative menu-approach is discussed.  1998 Elsevier S...

This paper presents a conjectural variation equilibrium model of a single-node electricity market. The distinctive modeling feature introduced in this paper is the effect of congestion between areas on generators’ behavior. The results show that if there is a congestion between two areas, generators valued differently the production of each area, and give more importance to the importing area.