Supply Function Equilibria with Capacity Constraints and Pivotal Suppliers

The concept of a supply function equilibrium (SFE) has been widely used to model generators’ bidding behavior and market power issues in wholesale electricity markets. Observers of electricity markets have noted how generation capacity constraints may contribute to market power of generation firms. If a generation firm’s rivals are capacity constrained then the firm may be pivotal; that is, the firm could substantially raise the market price by unilaterally withholding output. However the SFE literature has not properly analyzed the impact of capacity constraints and pivotal firms on equilibrium predictions. We characterize the set of symmetric supply function equilibria for uniform price auctions when firms are capacity constrained and show that this set is increasing as capacity per firm rises. We provide conditions under which asymmetric equilibria exist and characterize these equilibria. In addition, we compare results for uniform price auctions to those for discriminatory auctions, and we compare our SFE predictions to equilibrium predictions of models in which bidders are constrained to bid on discrete units of output.supply function equilibrium, pivotal firm, wholesale electricity market

Investment Dynamics: Good News Principle

We study a dynamic Cournot game with capacity accumulation under demand uncertainty, in which the investment is perfectly divisible, irreversible, and productive with a lag. We characterize equilibrium investments under closed-loop and S-adapted open-loop information structures. Contrary to what is established usually in the dynamic games literature with deterministic demand, we find that the firms may invest at a higher level in the open-loop equilibrium (which in some cases coincides with Markov perfect equilibrium) than in the closed-loop Nash equilibrium. The rankings of the investment levels obtained in the two equilibria actually depend on the initial capacities and on the degree of asymmetry between the firms. We also observe, contrary to the bad news principle of investment, that firms may invest more as demand volatility increases and they invest as if high demand (i.e., good news) will unfold in the future.Capacity Investment, Dynamic Games, S-adapted Open-Loop Equilibrium, Closed-loop Equilibrium.

Multimarket Contact in Vertically Related Markets

We analyze collusion in two comparable market structures. In the first market structure only one firm is vertically integrated; there is one more independent firm in the upstream industry and another independent firm in the downstream industry. In the second market structure, there are only two vertically integrated firms that can trade among themselves in the intermediate good market. The second market structure mimics markets like the California gasoline market where firms vertically integrated through refinery, and retail markets. We rank these two market structures in terms of ease of collusion and show that while under some circumstances collusion is not possible in the market with one vertically integrated firm, collusion is possible in the market structure with two vertically integrated firms. We conclude that vertical (multimarket) contact facilitates collusion and vertical mergers suspected to lead to subsequent vertical mergers in an industry should receive higher antitrust scrutiny relative to single isolated vertical mergers.Multimarket; collusion; vertical integration; gasoline markets

Dynamic Competition in Electricity Markets: Hydroelectric and Thermal Generation

We study competition between hydro and thermal electricity generators that face uncertainty over demand and water flows where the hydro generator is constrained by water flows and the thermal generator by capacity. We compute the Feedback equilibrium for the in?nite horizon game and show that there can be strategic withholding of water by the hydro generator. When water inflow is relatively low, however, the hydro generator may use more water than efficient as it faces an inefficiently low shadow price of water in this case. The inefficiency of the market outcome is tempered by the capacity constraints: for a large range of possible thermal production capacities and water flow levels, welfare loss under the duopoly market structure is much less than would occur in the absence of water and capacity constraints.Electricity markets; Electricity markets; Hydroelectricity; Imperfect Competition

Investment in Electricity Markets with Asymmetric Technologies

We study competition between hydro and thermal electricity generators under de- mand uncertainty. Producers compete in quantities and each is constrained: the ther- mal generator by capacity and the hydro generator by water availability. We analyze a two-period game emphasizing the incentives for capacity investments by the ther- mal generator. We characterize both Markov perfect and open-loop equilibria. In the Markov perfect equilibrium, investment is discontinuous in initial capacity and higher than it is in the open-loop equilibrium. However, since there are two distortions in the model, equilibrium investment can be either higher or lower than the ecient investment.Electricity markets; Dynamic game; Duopoly; Capacity investment.

Religious education in two secular multicultural societies. The Turkish and Dutch case compared

In this paper we present in the first section the historical antecedents of the Turkish and Dutch educational system regarding religion(s) in education. In the second section we will outline the different approaches in religious education in both countries. In the third section the focus is on the relationship between state and church. In the fourth section the issue is how in both countries curricula and textbooks for religious education are constructed, checked and approved. Finally, we will summarize the most remarkable points of comparison between the Dutch and the Turkish case regarding religion(s) in education. © 2011 Published by Elsevier Ltd

Equilibrium Predictions in Wholesale Electricity Markets

We review supply function equilibrium models and their predictions on market outcomes in the wholesale electricity auctions. We discuss how observable market characteristics such as capacity constraints, number of power suppliers, load distribution and auction format affect the behavior of suppliers and performance of the market. We specifically focus on the possible market power exerted by pivotal suppliers and the comparison between discriminatory and uniform-price auctions. We also describe capacity investment behavior of electricity producers in the restructured industry.Electricity markets; Supply function equilibrium; Markov perfect equilibrium; electricity auctions; pivotal suppliers; capacity investment.

Electricity Trade Patterns in a Network: Evidence from the Ontario Market

We investigate whether trade has any effect on the price formation process in a specific electricity market, and identify interconnected markets that have higher impacts on prices in that market. In particular, we study Ontario wholesale electricity market and its trade with 12 interconnected markets including New York, Michigan, and Minnesota markets. We find that imports are unambiguously related to prices, while exports are not. Furthermore, imports have a positive and significant relationship with prices. We argue that the results are associated with auction design, production constraints, and technological differences. Out of the 12 studied interties, only three have a significant impact on price, two of which are the largest ones.electricity trade; simultaneous trade; transmission network; electricity prices; nonlinear Granger causality; Ontario, New York, Michigan, Manitoba, Quebec wholesale electricity markets.

Structural Change in MENA Remittance Flows

After independence, the GCC countries relied heavily on foreign workers from fellow Arab countries. Thus, remittances flowed from GCC to other countries in MENA. In the 1980s-1990s labor source switched to South Asia; so did the flow of remittances. This paper examines the consequences of the shift in the source of labor by econometrically testing the existence of structural breaks in the flow of remittances in the MENA region. The change in the direction of remittance flows deprived several MENA labor exporters of large sums of foreign exchange, adding significant economic, social and political hardships on non-GCC MENA countries

Apparent stress-strain relationships in experimental equipment where magnetorheological fluids operate under compression mode

Abstract: This paper presents an experimental investigation of two different magnetorheological ( MR) fluids, namely, water-based and hydrocarbon-based MR fluids in compression mode under various applied currents. Finite element method magnetics was used to predict the magnetic field distribution inside the MR fluids generated by a coil. A test rig was constructed where the MR fluid was sandwiched between two flat surfaces. During the compression, the upper surface was moved towards the lower surface in a vertical direction. Stress-strain relationships were obtained for arrangements of equipment where each type of fluid was involved, using compression test equipment. The apparent compressive stress was found to be increased with the increase in magnetic field strength. In addition, the apparent compressive stress of the water-based MR fluid showed a response to the compressive strain of greater magnitude. However, during the compression process, the hydrocarbon-based MR fluid appeared to show a unique behaviour where an abrupt pressure drop was discovered in a region where the apparent compressive stress would be expected to increase steadily. The conclusion is drawn that the apparent compressive stress of MR fluids is influenced strongly by the nature of the carrier fluid and by the magnitude of the applied current