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Limit Pricing and Entry Game of Renewable Energy Firms into the Energy Sector

Author

Listed:
  • Willi Semmler
  • Giovanni Di Bartolomeo
  • Behnaz Minooei Fard
  • Joao Paulo Braga

Abstract

In the energy sector, fossil fuel incumbents often inhibit renewable energy entrants. This paper presents a game-theoretic model of competition between these firms. Using a dynamic limit pricing model, we study entry dynamics and the effects of financial and fiscal policies on competition, applying nonlinear model predictive control for scenario prediction.

Suggested Citation

  • Willi Semmler & Giovanni Di Bartolomeo & Behnaz Minooei Fard & Joao Paulo Braga, 2022. "Limit Pricing and Entry Game of Renewable Energy Firms into the Energy Sector," wp.comunite 00158, Department of Communication, University of Teramo.
    • Handle: RePEc:ter:wpaper:00158
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    Cited by:

    1. Lin, Tao & Zhang, Ling & Li, Jianglong, 2024. "Coupling and coordinated development of green finance and renewable energy industry in China: Spatiotemporal differentiation and driving factors," Renewable Energy, Elsevier, vol. 235(C).
    2. Lu, Ling & Liu, Peng & Yu, Jian & Shi, Xunpeng, 2023. "Digital inclusive finance and energy transition towards carbon neutrality: Evidence from Chinese firms," Energy Economics, Elsevier, vol. 127(PB).
    3. Behnaz Minooei Fard & Willi Semmler & Giovanni Di Bartolomeo, 2023. "Rare Earth Elements: A game between China and the rest of the world," Working Papers in Public Economics 235, Department of Economics and Law, Sapienza University of Rome.
    4. Jianping Gu & Yi Li & Jingke Hong & Lu Wang, 2024. "Carbon emissions cap or energy technology subsidies? Exploring the carbon reduction policy based on a multi-technology sectoral DSGE model," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 11(1), pages 1-17, December.
    5. Chen, Pu & Semmler, Willi, 2024. "Wage – price dynamics and financial market in a disequilibrium macro model: A Keynes – Kaldor – Minsky modeling of recession and inflation using VECM," Journal of Economic Behavior & Organization, Elsevier, vol. 220(C), pages 433-452.
    6. Braga, Joao Paulo & Semmler, Willi & Grass, Dieter, 2021. "De-risking of green investments through a green bond market – Empirics and a dynamic model," Journal of Economic Dynamics and Control, Elsevier, vol. 131(C).
    7. Willi Semmler & Brigitte Young, 2024. "Threats of sovereign debt overhang in the EU, the new fiscal rules and the perils of policy drift," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 41(2), pages 565-595, July.

    More about this item

    Keywords

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    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis

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