The Strategic Robustness of Mark-up Equilibria

David M Newbery and Thomas Greve ()

Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge

Abstract: This paper is an extension of the paper 'The Robustness of Agent-Based Models of Electricity Wholesale Markets', EPRG1213 which was motivated by the problem of analysing market power in liberalised electricity markets. That paper examined two particular forms of agent-based models commonly used in electricity market modelling, and showed that while these mark-up equilibria are robust against Nash deviations. This paper extends the earlier results to explain why these equilibria are robust to single firm Nash Cournot deviations but shows they are vulnerable to more sophisticated deviations.

Keywords: mark-up equilibria; stability; oligopoly; agent-based modelling; learning Classification-JEL C63; C73 D43 10 L13 194 (search for similar items in EconPapers)
Date: 2013-11-27
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Persistent link: https://EconPapers.repec.org/RePEc:cam:camdae:1341

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