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Infinite horizon hydroelectricity games

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  • Robles, Jack

Abstract

We present an infinite horizon game between a hydro power plant and a thermal power plant. The Markov perfect equilibrium is characterized and related to the closed loop equilibrium of a one year finite horizon game. We show that the infinite horizon and one year horizon models make predictions which are surprisingly similar. Essential differences in predictions are noted.

Suggested Citation

  • Robles, Jack, 2016. "Infinite horizon hydroelectricity games," Working Paper Series 5075, Victoria University of Wellington, School of Economics and Finance.
  • Handle: RePEc:vuw:vuwecf:5075
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    File URL: http://researcharchive.vuw.ac.nz/handle/10063/5075
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    References listed on IDEAS

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    Keywords

    Energy market; Hydroelectricity; Markov Perfect Equilibrium; Cournot competition;
    All these keywords.

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