Durable Goods Oligopoly with Secondary Markets: the Case of Automobiles

We study the effects of durability and secondary markets on equilibrium firm behavior in the car market. We construct a dynamic oligopoly model of a differentiated product market to incorporate the equilibrium production dynamics which arise from the durability of the goods and their active trade in secondary markets. We derive an econometric model and estimate its parameters using data from the automobile industry over a twenty-year period. Our estimates are used to provide a measure of the competitive importance of the secondary market.Publicad

Moving-Horizon Dynamic Power System State Estimation Using Semidefinite Relaxation

Accurate power system state estimation (PSSE) is an essential prerequisite for reliable operation of power systems. Different from static PSSE, dynamic PSSE can exploit past measurements based on a dynamical state evolution model, offering improved accuracy and state predictability. A key challenge is the nonlinear measurement model, which is often tackled using linearization, despite divergence and local optimality issues. In this work, a moving-horizon estimation (MHE) strategy is advocated, where model nonlinearity can be accurately captured with strong performance guarantees. To mitigate local optimality, a semidefinite relaxation approach is adopted, which often provides solutions close to the global optimum. Numerical tests show that the proposed method can markedly improve upon an extended Kalman filter (EKF)-based alternative.Comment: Proc. of IEEE PES General Mtg., Washnigton, DC, July 27-31, 2014. (Submitted