EconPapers    
Economics at your fingertips  
 

An Oligopolistic Investment Model of the Finnish Electricity Market

Pierre-Olivier Pineau () and Pauli Murto

Annals of Operations Research, 2003, vol. 121, issue 1, 123-148

Abstract: The investment problem faced by producers in deregulated electricity markets contains high uncertainties about the future. It can also be seen as a game, as only a small number of large players act in the market. A dynamic stochastic oligopoly model to describe the production and investment in such a situation is developed and applied to the Finnish electricity market. The demand growth rate is modeled as a stochastic variable. The strategies of the firms consist of investments and production levels for base and peak load periods. The firms have nuclear, hydro and thermal capacities, but are only allowed to invest in new thermal capacity. Using a so-called sample-path adapted open-loop information structure, the model contributes to the understanding of the dynamics of production, investment and market power in a medium time horizon. The solution method uses recent developments in variational inequality and mixed complementarity problem formulations. Copyright Kluwer Academic Publishers 2003

Keywords: investment; oligopoly; uncertainty; dynamic games; S-adapted equilibrium; electricity markets (search for similar items in EconPapers)
Date: 2003
References: Add references at CitEc
Citations: View citations in EconPapers (17) Track citations by RSS feed

Downloads: (external link)
http://hdl.handle.net/10.1023/A:1023307319633 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:annopr:v:121:y:2003:i:1:p:123-148:10.1023/a:1023307319633

Ordering information: This journal article can be ordered from
http://www.springer.com/journal/10479

DOI: 10.1023/A:1023307319633

Access Statistics for this article

Annals of Operations Research is currently edited by Endre Boros

More articles in Annals of Operations Research from Springer
Bibliographic data for series maintained by Sonal Shukla ().

 
Page updated 2020-04-23
Handle: RePEc:spr:annopr:v:121:y:2003:i:1:p:123-148:10.1023/a:1023307319633