155 research outputs found

    The role of a market maker in networked Cournot competition

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    We study the role of a market maker (or market operator) in a transmission constrained electricity market. We model the market as a one-shot networked Cournot competition where generators supply quantity bids and load serving entities provide downward sloping inverse demand functions. This mimics the operation of a spot market in a deregulated market structure. In this paper, we focus on possible mechanisms employed by the market maker to balance demand and supply. In particular, we consider three candidate objective functions that the market maker optimizes - social welfare, residual social welfare, and consumer surplus. We characterize the existence of Generalized Nash Equilibrium (GNE) in this setting and demonstrate that market outcomes at equilibrium can be very different under the candidate objective functions

    A demonstration of an application of the Bertrand Network: Guessing the distribution of buyers within the market

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    Bertrand and the Cournot model are one of the most used model for modeling competition between companies. This paper presents a work-in-progress that studies the application of the recently developed Bertrand Network model by using it in a reverse manner: first it is considered that firms are competing in equilibrium, then, after analyzing how companies are choosing prices, it is calculated which distribution of buyers would lead to that equilibrium. An unreal example is presented to help to understand the model. Furthermore, a formula is suggested to expand the networked model to allow a mix of duopolies and oligopolies

    Temporally Networked Cournot Platform Markets

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    In networked markets, information can help firms make better decisions on which market (platform), and how much, to participate. However, these markets may be temporally separated, e.g., independent system operators in different geographical locations. We model these via networked Cournot markets, but instead consider the participation of one firm to either be with the realization (or full information) of a random market, or only with the statistics of the random market, modeled by an additive zero-mean random variable on the maximal price. We show that firms not knowing the realization of the random variable would participate in both markets in the same way as if the mean was realized. We then present global effects: we prove that profit is improved for every firm when one\u27s information improves but social welfare may get better or worst with more information

    Networked Cournot Competition in Platform Markets: Access Control and Efficiency Loss

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    This paper studies network design and efficiency loss in open and discriminatory access platforms under networked Cournot competition. In open platforms, every firm connects to every market, while discriminatory platforms limit connections between firms and markets to improve social welfare. We provide tight bounds on the efficiency loss of both platforms; (i) that the efficiency loss at a Nash equilibrium under open access is bounded by 3/2, and (ii) for discriminatory access platforms, we provide a greedy algorithm for optimizing network connections that guarantees efficiency loss at a Nash equilibrium is bounded by 4/3, under an assumption on the linearity of cost functions

    Contingency Management in Power Systems and Demand Response Market for Ancillary Services in Smart Grids with High Renewable Energy Penetration.

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    Ph.D. Thesis. University of Hawaiʻi at Mānoa 2017

    Transparency and Control in Platforms for Networked Markets

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    In this work, we analyze the worst case efficiency loss of online platform designs under a networked Cournot competition model. Inspired by some of the largest platforms today, the platform designs considered tradeoffs between transparency and control, namely, (i) open access, (ii) controlled allocation and (iii) discriminatory access. Our results show that open access designs incentivize increased production towards perfectly competitive levels and limit efficiency loss, while controlled allocation designs lead to producer-platform incentive misalignment, resulting in low participation and unbounded efficiency loss. We also show that discriminatory access designs seek a balance between transparency and control, and achieve the best of both worlds, maintaining high participation rates while limiting efficiency loss. We also study a model of consumer search cost which further distinguishes between the three designs

    Evaluating market pricing competition with the Bertrand Network

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    Mestrado de dupla diplomação com a UTFPR - Universidade Tecnológica Federal do ParanáRecently in the literature, there have been many attempts to expand classic models of market competition analysis. Considering firms are competing globally against many different sellers over different markets, recent works proposed a model where it is possible to represent competition among companies where they compete against each other directly and indirectly, using a hypergraph to represent the competition structure. This document presents an attempt to demonstrate how the young and maturing networked price competition model, which allows finding the best price for the companies from the competition structure and market sizes, can be used in any case of study. This work continues the recent demand to adapt the famous Bertrand competition model, where sellers ask for prices. Since there are no recent works which use the recent model, it has been presented how to use it in such a way that is possible to guess the competition structure and the distribution of the buyers by only by observing how companies are pricing. To better understand the applications of the existing method, the first real case of study which has used the Bertrand Network model is presented: a competition among 6 flight companies, where prices were collected by using the Google Flight tracking service, concluding that the proofs and claims developed in this work are useful to enhance market analysis
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