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Supply function equilibria for uniform price auction in oligopolistic markets

Author

Listed:
  • Alexander Vasin

    (Lomonosov Moscow State University)

  • Marina Dolmatova

    (Lomonosov Moscow State University)

  • Gerhard-Wilhelm Weber

    (Middle East Technical University)

Abstract

We consider game-theoretic models related to the supply function auction for electricity markets. We determine the set of supply function equilibria (SFE), introduced by Klemperer and Mayer (Econometrica 57:1243–1277, 1989), for a symmetric oligopoly with linear demand, fixed marginal cost and capacity constraint. This set depends on the maximum random shock of the demand function. We also study the best response dynamics and show that in general it does not converge to any SFE. We find out sufficient conditions for the convergence and conclude on the optimal parameters of the auction.

Suggested Citation

  • Alexander Vasin & Marina Dolmatova & Gerhard-Wilhelm Weber, 2016. "Supply function equilibria for uniform price auction in oligopolistic markets," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 24(4), pages 819-831, December.
    • Handle: RePEc:spr:cejnor:v:24:y:2016:i:4:d:10.1007_s10100-015-0390-y
    DOI: 10.1007/s10100-015-0390-y
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    References listed on IDEAS

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