Unique Supply Function Equilibrium with Capacity Constraints

Arbeitspapier

Consider a market where producers submit supply functions to a procurement auction — e.g. an electric power auction — under uncertainty, before demand has been realized. In the Supply Function Equilibrium (SFE), every firm commits to the supply function maximizing his expected profit given the supply functions of the competitors. The presence of multiple equilibria is one basic weakness of SFE. This paper shows that with (i) symmetric producers, (ii) inelastic demand, (iii) a reservation price, and (iiii) capacity constraints that bind with a positive probability, there is a unique symmetric SFE.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Working Paper ; No. 2004:20

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection ; Auctions ; Production, Pricing, and Market Structure; Size Distribution of Firms ; Oligopoly and Other Imperfect Markets ; Electric Utilities
• Thema: Supply function equilibrium ; auction ; oligopoly ; capacity constraint ; wholesale electricity market ; Angebot ; Kapazitätsauslastung ; Elektrizität ; Oligopol ; Auktionstheorie

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Holmberg, Pär
• Ereignis: Veröffentlichung
• (wer): Uppsala University, Department of Economics
• (wo): Uppsala
• (wann): 2004

Weitere Informationen

• Handle: http://hdl.handle.net/10419/82749
• Letzte Aktualisierung: 10.03.2025, 11:44 MEZ