A review of non-cooperative newsvendor games with horizontal inventory interactions

There are numerous applications of game theory in the analysis of supply chains where multiple actors interact with each other in order to reach their own objectives. In this paper we review the use of non-cooperative game theory in inventory management within the newsvendor framework describing a single period inventory control model with the focus on horizontal interactions among multiple independent newsvendors. We develop a framework for identifying these types of horizontal interactions including, for example, the models with the possibility of inventory sharing via transshipments, and situations with substitutable products sold by multiple newsvendors. Based on this framework, we discuss and relate the results of prior research and identify future research opportunities

Climate change in game theory context

The aim of this paper is to survey the game theory modelling of the behaviour of global players in mitigation and adaptation related to climate change. Three main fields are applied for the specific aspects of temperature rise: behaviour games, CPR problem and negotiation games. The game theory instruments are useful in analyzing strategies in uncertain circumstances, such as the occurrence and impacts of climate change. To analyze the international players’ relations, actions, attitude toward carbon emission, negotiation power and motives, several games are applied for the climate change in this paper. The solution is surveyed, too, for externality problem

Climate change in game theory

The study provides an overview of the application possibilities of game theory to climate change. The characteristics of games are adapted to the topics of climate and carbon. The importance of uncertainty, probability, marginal value of adaptation, common pool resources, etc. are tailored to the context of international relations and the challenge of global warming

Electricity trading based on distribution locational marginal price

Department of Finance and Education of Guangdong Province; Education Department of Guangdong Province; Brunel University Londo

Monetary Policy and the Political Support for a Labor Market Reform

Lagged benefits relative to costs can politically block an efficiency-enhancing labor market reform, lending support to the two-handed approach. An accommodating monetary policy, conducted alongside the reform, could help bringing the positive effects of the reform to the fore. In order to identify the mechanisms through which monetary policy may affect the political sustainability of a reform, we add stylized features of the labor market to a standard New-Keynesian model for monetary policy analysis. A labor market reform is modeled as a structural change inducing a permanent shift in the flexible-price unemployment and output levels. In addition to the permanent gains, the impact of the timing and magnitude of the reform-induced adjustments on the welfare of workers - employed and unemployed - is crucial to the political feasibility of the reform. Since the adjustments depend, on one hand, on the macroeconomic structure and, on the other hand, can be influenced by monetary policy, we simulate various degrees of output persistence across different policy rules. We find that, if inertias are present, monetary policy, even when conducted by an independent central bank, affects the political support for the reform. In general, the more expansionary (or the less contractionary) the policy is, the faster is the recovery to the new steady-state equilibrium and, thus, the stronger is the political support.Monetary policy rules; Labor market reforms; Unemployment benefit; Political economy; New-Keynesian models

Opening of Ancillary Service Markets to Distributed Energy Resources: A Review

Electric power systems are moving toward more decentralized models, where energy generation is performed by small and distributed power plants, often from renewables. With the gradual phase out from fossil fuels, however, Distribution Energy Resources (DERs) are expected to take over in the provision of all regulation services required to operate the grid. To this purpose, the opening of national Ancillary Service Markets (ASMs) to DERs is considered an essential passage. In order to allow this transition to happen, current opportunities and barriers to market participation of DERs must be clearly identified. In this work, a comprehensive review is provided of the state-of-the-art of research on DER integration into ASMs. The topic at hand is analyzed from different perspectives. First, the current situation and main trends regarding the reformation processes of national ASMs are analyzed to get a clear picture of the evolutions expected and adjustment required in the future, according to the scientific community. Then, the focus is moved to the strategies to be adopted by aggregators for the effective control and coordination of DERs, exploring the challenges posed by the uncertainties affecting the problem. Coordination schemes between transmission and distribution system operators, and the implications on the grid infrastructure operation and planning, are also investigated. Finally, the review deepens the control capabilities required for DER technologies to perform the needed control actions

Online decentralized tracking for nonlinear time-varying optimal power flow of coupled transmission-distribution grids

The coordinated alternating current optimal power flow (ACOPF) for coupled transmission-distribution grids has become crucial to handle problems related to high penetration of renewable energy sources (RESs). However, obtaining all system details and solving ACOPF centrally is not feasible because of privacy concerns. Intermittent RESs and uncontrollable loads can swiftly change the operating condition of the power grid. Existing decentralized optimization methods can seldom track the optimal solutions of time-varying ACOPFs. Here, we propose an online decentralized optimization method to track the time-varying ACOPF of coupled transmission-distribution grids. First, the time-varying ACOPF problem is converted to a dynamic system based on Karush-Kuhn-Tucker conditions from the control perspective. Second, a prediction term denoted by the partial derivative with respect to time is developed to improve the tracking accuracy of the dynamic system. Third, a decentralized implementation for solving the dynamic system is designed based on only a few information exchanges with respect to boundary variables. Moreover, the proposed algorithm can be used to directly address nonlinear power flow equations without relying on convex relaxations or linearization techniques. Numerical test results reveal the effectiveness and fast-tracking performance of the proposed algorithm.Comment: 18 pages with 15 figure

Three essays on pricing and risk management in electricity markets

A set of three papers forms this dissertation. In the first paper I analyze an electricity market that does not clear. The system operator satisfies fixed demand at a fixed price, and attempts to minimize cost as indicated by independent generators\u27 supply bids. No equilibrium exists in this situation, and the operator lacks information sufficient to minimize actual cost. As a remedy, we propose a simple efficient tax mechanism. With the tax, Nash equilibrium bids still diverge from marginal cost but nonetheless provide sufficient information to minimize actual cost, regardless of the tax rate or number of generators.;The second paper examines a price mechanism with one price assigned for each level of bundled real and reactive power. Equilibrium allocation under this pricing approach raises system efficiency via better allocation of the reactive power reserves, neglected in the traditional pricing approach. Pricing reactive power should be considered in the bundle with real power since its cost is highly dependent on real power output. The efficiency of pricing approach is shown in the general case, and tested on the 30-bus IEEE network with piecewise linear cost functions of the generators.;Finally the third paper addresses the problem of optimal investment in generation based on mean-variance portfolio analysis. It is assumed the investor can freely create a portfolio of shares in generation located on buses of the electrical network. Investors are risk averse, and seek to minimize the variance of the weighted average Locational Marginal Price (LMP) in their portfolio, and to maximize its expected value. I conduct simulations using a standard IEEE 68-bus network that resembles the New York - New England system and calculate LMPs in accordance with the PJM methodology for a fully optimal AC power flow solution. Results indicate that the network topology is a crucial determinant of the investment decision as line congestion makes it difficult to deliver power to certain nodes at system peak load. Determining those nodes is an important task for an investor in generation as well as the transmission system operator