Infinite horizon hydroelectricity games

Jack Robles

No 19421, Working Paper Series from Victoria University of Wellington, School of Economics and Finance

Abstract: We present an infinite horizon game between a hydro power plant and a thermal power plant. The Markov perfect equilibrium is characterized and related to the closed loop equilibrium of a one year finite horizon game. We show that the infinite horizon and one year horizon models make predictions which are surprisingly similar. Essential differences in predictions are noted.

Keywords: Energy market; Hydroelectricity; Markov Perfect Equilibrium; Cournot competition (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:vuw:vuwecf:19421

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