A Strategic Model Of European Gas Supply

Structural changes in the European natural gas market such as liberalization, increasing domestic demand, and increasing import dependency have triggered new attempts to model these markets accurately. In this paper, we propose an exhaustive model of the European natural gas supply including the possibility of strategic behaviour of the agents along the value-added chain. We structure it as a two-stage-game with natural gas exports to Europe (first stage) and wholesale trade within Europe (second stage).  The case of non-cooperative Cournot competition at both stages proves to be the most realistic scenario. The results of the perfect competition and cartel scenario are also presented. Our results suggest that the main suppliers of natural gas to Europe (Russia, Algeria, the Netherlands, Norway) remain dominant, but that they are complemented by overseas supplies of liquefied natural gas (LNG). The model also enables us to identify transport infrastructure bottlenecks where transport capacity constraints are binding

Liberalization of mexican electricity market : various modeling approaches with numerical simulation results

In this paper we investigate the Mexican real estate market, especially the economy class homes. This sector plays an important role for Mexican social stability. We investigate the Cournot and Stackelberg mixed duopoly models where a stateowned public firm maximizing domestic social surplus, and a foreign firm searching to maximize its own profit, compet

A strategic model of european gas supply

Structural changes in the European natural gas market such as liberalization, increasing domestic demand, and increasing import dependency have triggered new attempts to model these markets accurately. In this paper, we propose an exhaustive model of the European natural gas supply including the possibility of strategic behaviour of the agents along the value-added chain. We structure it as a two-stage-game with natural gas exports to Europe (first stage) and wholesale trade within Europe (second stage). The case of non-cooperative Cournot competition at both stages proves to be the most realistic scenario. The results of the perfect competition and cartel scenario are also presented. Our results suggest that the main suppliers of natural gas to Europe (Russia, Algeria, the Netherlands, Norway) remain dominant, but that they are complemented by overseas supplies of liquefied natural gas (LNG). The model also enables us to identify transport infrastructure bottlenecks where transport capacity constraints are binding

Gaussian and Cauchy Functions in the Filled Function Method – Why and What Next: On the Example of Optimizing Road Tolls

Abstract: In many practical problems, we need to find the values of the parameters that optimize the desired objective function. For example, for the toll roads, it is important to set the toll values that lead to the fastest return on investment. There exist many optimization algorithms, the problem is that these algorithms often end up in a local optimum. One of the promising methods to avoid the local optima is the filled function method, in which we, in effect, first optimize a smoothed version of the objective function, and then use the resulting optimum to look for the optimum of the original function. It turns out that empirically, the best smoothing functions to use in this method are the Gaussian and the Cauchy functions. In this paper, we show that from the viewpoint of computational complexity, these two smoothing functions are indeed the simplest. The Gaussian and Cauchy functions are not a panacea: in some cases, they still leave us with a local optimum. In this paper, we use the computational complexity analysis to describe the next-simplest smoothing functions which are worth trying in such situations. Keywords: optimization; toll roads; filled function method; Gaussian and Cauchy smoothin

Identification of Quasi-Stationary Dynamic Objects with the Use of Derivative Disproportion Functions

This paper presents an algorithm for designing a cryptographic system, in which the derivative disproportion functions (key functions) are used. This cryptographic system is used for an operative identification of a differential equation describing the movement of quasi-stationary objects. The symbols to be transmitted are encrypted by the sum of at least two of these functions combined with random coefficients. A new algorithm is proposed for decoding the received messages making use of important properties of the derivative disproportion functions

Consistent Conjectural Variations Equilibrium In A Bilevel Human Migration Model

In this paper, we develop a bi-level human migration model using the concept of conjectural variations equilibrium (CVE). In contrast to previous works, here we construct a bi-level programming model. The upper level agents are municipalities of competing locations, whose strategies are investments into infrastructures of the locations (cities, towns, etc.). These investments aim at making the locations more attractive for both the residents and potential migrants from other locations. At the lower level of the model, the present residents (grouped into professional communities) are also considered as potential migrants to other locations. They make their decision where to migrate (if at all) comparing the expected values of the utility functions of the destinations and original locations, which are estimated by taking into account their group's conjectures concerning equilibrium migration flows between the involved locations. Applying a special technique to verify the consistency of the conjectures (influence coefficients), the existence and uniqueness results for the consistent conjectural variations equilibrium (CCVE) are established

Fragment-aided recognition of images under poor lighting and additive impulse noises

On the base of the first-order integral disproportion functions, two algorithms recognizing fragments of standard images are proposed. Due to the disproportion functions techniques, the algorithms have special advantages when processing poorly lighted images, as well as with signals transmitted in the presence of additive impulse noises

Bilevel programming and applications

A great amount of new applied problems in the area of energy networks has recently arisen that can be efficiently solved only as mixed-integer bilevel programs. Among them are the natural gas cash-out problem, the deregulated electricity market equilibrium problem, biofuel problems, a problem of designing coupled energy carrier networks, and so forth, if we mention only part of such applications. Bilevel models to describe migration processes are also in the list of the most popular new themes of bilevel programming, as well as allocation, information protection, and cybersecurity problems. This survey provides a comprehensive review of some of the above-mentioned new areas including both theoretical and applied results

A Strategic Model Of European Gas Supply

ABSTRACT Structural changes in the European Keywords: natural gas, strategic behaviour, non-linear optimization INTRODUCTION he European gas market has a number of a various aspects: from the definition of the most suitable economic behaviour to the market liberalization which aims to boost competition at the level of each member state as well as within the European Union (EU), to the decrease in the dependency on certain non-EU suppliers, which should increase the competition among the non-EU exporters. Therefore, observing the strategic behaviour of the market players (e.g. related to net access, cooperation or refusal to collaborate, etc.) becomes crucial. There are different mathematical models for describing the behaviour of a competitive market. For the scope of this paper, the EU natural gas market is modelled using a game theoretic model. The authors compare the strategic behaviour of the market players reflected by their market influences based on the Nash equilibrium theory among an environment of perfect competition. In the case of perfect competition, each agent acts as a price taker, equalizing prices and marginal costs in order to optimise profit. The paper further considers the Cournot model, at the Nash equilibrium, where electricity firms aim to maximize their profit and enlarge their market shares taking into consideration various relationships between the real market elasticity values and assumptions about the behaviour of other players. The results of the cartel model are also presented. The model follows a number of other modelling attempts of the European gas sector. The structure of the sector suggests modelling the market with oligopolistic competition in a game theoretic framework. Most models actually distinguish the upstream market among producers (gas extraction/production taking place mostly outside Europe) and the downstream trader market (i.e. the wholesale market inside Europe)

Operations Research and Bilevel Programming

Operations Research (OR) and its applications is one of the most popular and fast growing majors of the students at universities throughout the world. The number of helpful and renown OR textbooks is enormous. However, up to our knowledge, there is no single textbook touching such an important new part of OR and of optimization in general as bilevel programming (BLP). The eBook is based on the authors’ 10-year experience teaching this course at Tecnológico de Monterrey, Campus Monterrey. Their experience in BLP research is also of use. Therefore, the aim of this eBook is to enrich a standard OR course with elements of the theoretical foundations and applications of BLP