Cournot Oligopoly Theory for Simple Electricity Markets

Alexander Vasin () and Polina Kartunova
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Alexander Vasin: Lomonosov Moscow State University

A chapter in Equilibrium Theory for Cournot Oligopolies and Related Games, 2016, pp 155-178 from Springer

Abstract: Abstract The present paper surveys and generalizes the previous results on Cournot competition for the classic model and two-node markets in context of electricity markets development. We recall results on existence and computation of Cournot-Nash equilibrium and its relation to the uniform price auction. Then for a two-node market we consider different types of equilibria with binding and unbinding transmission capacity constraints. For each type we examine local equilibria which meet first-order conditions, their computation employing the concept of Cournot supply function, existence and co-existence of different types’ equilibria. We search for the optimal transmission capacity that maximizes the social welfare, recall the previous results for a perfectly competitive two-node market and study the problem for the Cournot oligopoly.

Keywords: Nash Equilibrium; Demand Function; Equilibrium Price; Electricity Market; Transmission Capacity (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:spr:spschp:978-3-319-29254-0_11

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DOI: 10.1007/978-3-319-29254-0_11

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