Supply function equilibria for uniform price auction in oligopolistic markets

Date

2016-12-01

Author

Vasin, Alexander
Dolmatova, Marina
Weber, Gerhard Wilhelm

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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

Subject Keywords

Best response dynamics, Wholesale electricity market, Oligopoly, Auctions

URI

https://hdl.handle.net/11511/52217

Journal

CENTRAL EUROPEAN JOURNAL OF OPERATIONS RESEARCH

DOI

https://doi.org/10.1007/s10100-015-0390-y

Collections

Graduate School of Applied Mathematics, Article

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Citation Formats

A. Vasin, M. Dolmatova, and G. W. Weber, “Supply function equilibria for uniform price auction in oligopolistic markets,” CENTRAL EUROPEAN JOURNAL OF OPERATIONS RESEARCH, pp. 819–831, 2016, Accessed: 00, 2020. [Online]. Available: https://hdl.handle.net/11511/52217.