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Incentives and coordination in vertically related energy markets

Listed author(s):
  • Micola, Augusto Rupérez
  • Banal-Estañol, Albert
  • Bunn, Derek W.

We present an agent-based model of a multi-tier energy market. We show how reward interdependence between strategic business units within a vertically integrated firm can increase its profits in oligopolistic energy markets. The effects are shown to be distinct from those of the raising rivals' costs model. In our case, higher prices relate to the nature of energy markets, which facilitate the emergence of financial netback effects.

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File URL: http://www.sciencedirect.com/science/article/pii/S0167-2681(08)00098-X
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Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

Volume (Year): 67 (2008)
Issue (Month): 2 (August)
Pages: 381-393

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Handle: RePEc:eee:jeborg:v:67:y:2008:i:2:p:381-393
Contact details of provider: Web page: http://www.elsevier.com/locate/jebo

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  18. Roth, Alvin E. & Erev, Ido, 1995. "Learning in extensive-form games: Experimental data and simple dynamic models in the intermediate term," Games and Economic Behavior, Elsevier, vol. 8(1), pages 164-212.
  19. Hunger, David, 2003. "Analyzing Gas and Electric Convergence Mergers: A Supply Curve Is Worth a Thousand Words," Journal of Regulatory Economics, Springer, vol. 24(2), pages 161-173, September.
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