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Unique supply funct...
Abstract
Ämnesord
Stäng
- Consider a market where producers submit supply functions to a procurement auction with uncertain demand, e.g. an electricity auction. In the Supply Function Equilibrium (SFE), every firm commits to the supply function that maximises expected profit in the one-shot game given the supply functions of competitors. A basic weakness of the SFE is the presence of multiple equilibria. This paper shows that with (i) symmetric producers, (ii) perfectly inelastic demand, (iii) a price cap, and (iv) capacity constraints that bind with a positive probability, there exists a unique, symmetric SFE.
Ämnesord
- SAMHÄLLSVETENSKAP -- Ekonomi och näringsliv (hsv//swe)
- SOCIAL SCIENCES -- Economics and Business (hsv//eng)
Nyckelord
- Capacity constraint
- Oligopoly
- Supply function equilibrium
- Uniform-price auction
- Uniqueness
- Wholesale electricity market
- Business and economics
- Ekonomi
Publikations- och innehållstyp
- ref (ämneskategori)
- art (ämneskategori)
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