Supply Function Equilibria in Networks with Transport Constraints

Pär Holmberg () and Andrew Philpott
Additional contact information
Pär Holmberg: Research Institute of Industrial Economics (IFN), Postal: P.O. Box 55665, SE-102 15 Stockholm, Sweden, https://www.ifn.se/en/researchers/ifn-researcher/par-holmberg/
Andrew Philpott: Department of Engineering Science, Postal: University of Auckland

No 945, Working Paper Series from Research Institute of Industrial Economics

Abstract: Transport constraints limit competition and arbitrageurs possibilities of exploiting price differences between commodities in neighbouring markets. We analyze a transport-constrained network with local demand shocks, where spatially distributed oligopoly producers compete with supply functions, as in wholesale electricity markets. Uniqueness and existence results are proven, and we are able to explicitly solve for symmetric supply-function equilibria in some special cases.

Keywords: Spatial competition; Multi-unit auction; Supply-function equilibrium; Transmission network; Wholesale electricity markets (search for similar items in EconPapers)
JEL-codes: C72 D43 D44 L91 (search for similar items in EconPapers)
Pages: 72 pages
Date: 2012-12-18, Revised 2015-08-10
New Economics Papers: this item is included in nep-com, nep-ene, nep-gth, nep-mic, nep-net and nep-tre
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:hhs:iuiwop:0945

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