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Central European Journal of Operations Research

, Volume 24, Issue 4, pp 819–831 | Cite as

Supply function equilibria for uniform price auction in oligopolistic markets

  • Alexander Vasin
  • Marina Dolmatova
  • Gerhard-Wilhelm Weber
Original Paper
  • 175 Downloads

Abstract

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.

Keywords

Supply function equilibrium Best response dynamics   Wholesale electricity market Oligopoly Auctions 

Mathematics Subject Classification

91A40 91B26 91A80 

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Copyright information

© Springer-Verlag Berlin Heidelberg 2015

Authors and Affiliations

  • Alexander Vasin
    • 1
  • Marina Dolmatova
    • 1
  • Gerhard-Wilhelm Weber
    • 2
  1. 1.Faculty of Computational Mathematics and CyberneticsLomonosov Moscow State UniversityMoscowRussia
  2. 2.Institute of Applied MathematicsMiddle East Technical UniversityAnkaraTurkey

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