Incentives and co-ordination in vertically related energy markets
Journal
Journal of Economic Behavior and Organization
Subject
Management Science and Operations
Publishing details
Authors / Editors
Bunn D W;Micola R
Biographies
Publication Year
2008
Abstract
We present an agent-based model of a multi-tier energy market. We show how reward interdependence between strategic business units within a vertically integrated firm can increase its profits in oligopolistic energy markets. The effects are shown to be distinct from those of the raising rivals’ costs model. In our case, higher prices relate to the nature of energy markets, which facilitate the emergence of financial netback effects.
Keywords
Agent-based modelling; Energy markets; Reward interdependence
Available on ECCH
No