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Stochastic equilibrium modeling: The Impact of Uncertainty on the European Energy Market

Author

Listed:
  • Rolf Golombek
  • Kjell Arne Brekke
  • Michal Kaut
  • Sverre A.C. Kittelsen
  • Stein W. Wallace

Abstract

We present a simple approach to transform a deterministic numerical equilibrium model - where several agents simultaneously make decisions - into a stochastic equilibrium model. Our approach is used to build a large stochastic numerical equilibrium model of the Western European energy markets. We use the stochastic model to analyze the impact of economic uncertainty on the Western European energy markets; it is demonstrated that the equilibrium under uncertainty differs significantly from the deterministic outcome.

Suggested Citation

  • Rolf Golombek & Kjell Arne Brekke & Michal Kaut & Sverre A.C. Kittelsen & Stein W. Wallace, 2016. "Stochastic equilibrium modeling: The Impact of Uncertainty on the European Energy Market," EcoMod2016 9201, EcoMod.
    • Handle: RePEc:ekd:009007:9201
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    File URL: http://ecomod.net/system/files/StochasticScenarioMethod.17jun15.pdf
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    References listed on IDEAS

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    Keywords

    EU; Impact and scenario analysis; Agent-based modeling;
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