Modeling the strategic trading of electricity assets
AbstractWe analyze how strategic asset trading can be used to gain competitive advantage. In the case of electricity markets, companies seek to improve the value of their generating portfolios by acquiring, or selling, power plants. Accordingly, we derive the basic determinants of plant value, explaining how a particular productive asset may have different values for different firms. From this, we develop an evolutionary model to understand how market structure interacts with strategic asset trading to increase the competitive advantage of firms, and furthermore, how this depends upon the actual price-setting microstructure in the wholesale market itself
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Bibliographic InfoPaper provided by Society for Computational Economics in its series Computing in Economics and Finance 2006 with number 235.
Date of creation: 04 Jul 2006
Date of revision:
Competitive advantage; computational learning; auctions; asset trading; simulation; electricity markets;
Find related papers by JEL classification:
- L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
- L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-07-15 (All new papers)
- NEP-CMP-2006-07-15 (Computational Economics)
- NEP-COM-2006-07-15 (Industrial Competition)
- NEP-ENE-2006-07-15 (Energy Economics)
- NEP-FMK-2006-07-15 (Financial Markets)
- NEP-MST-2006-07-15 (Market Microstructure)
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