Equilibrium Uniqueness in a Cournot Model with Demand Uncertainty

Lagerlöf, Johan N. M.

doi:10.2202/1534-598x.1333

Cited by 15 publications

(30 citation statements)

References 3 publications

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“…2 ; has a Cournot equilibrium. 10 The function P (! ; ) need not (and typically will not) be di¤erentiable at Q (!)…”

Section: Cournot Equilibrium With Always Non-negative Pricesmentioning

confidence: 99%

“…In a non-linear setting, Einy et al (2003) derive conditions under which the value of public information in an oligopoly is either positive or negative, but assume that the …rms are symmetrically informed, which allows to reduce the equilibrium existence question to that in a complete information oligopoly. The assumption of symmetry of information, and a reduction to the complete information case that it allows, also stand behind the existence result of Lagerlöf (2006). In Einy et al (2002) a categorical approach is used: it is assumed that an equilibrium exists, and then its properties are investigated.…”

Section: Introductionmentioning

confidence: 99%

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On the existence of Bayesian Cournot equilibrium

Einy

Haimanko

Moreno

et al. 2010

Games and Economic Behavior

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We show that when …rms have incomplete information about the market demand and their costs, a (Bayesian) Cournot equilibrium in pure strategies may not exist, or be unique. In fact, we are able to construct surprisingly simple and robust examples of duopolies with these features. However, we also …nd some su¢ cient conditions for existence, and for uniqueness, of Cournot equilibrium in a certain class of industries.More general results arise when negative prices are possible.

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“…2 ; has a Cournot equilibrium. 10 The function P (! ; ) need not (and typically will not) be di¤erentiable at Q (!)…”

Section: Cournot Equilibrium With Always Non-negative Pricesmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

On the existence of Bayesian Cournot equilibrium

Einy

Haimanko

Moreno

et al. 2010

Games and Economic Behavior

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“…Their standard version concerns the case in which the players produce a good with complete information about the demand and production costs of all other players [18]. In the last decades extensive research has been dedicated to questions that arise when the information is incomplete, such as uncertainties in the demand or the producers' cost functions [19]. In [20] we have recently explored a game theoretic framework for multiple energy producers competing in energy market.…”

Section: Related Work and Discussionmentioning

confidence: 99%

Mean-field-type optimization for demand-supply management under operational constraints in smart grid

Tembiné

2015

Energy Syst

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The electricity business depends significantly on continuous, cost-effective sources of electricity, the efficient reaction to the demand and storage cost. But the increasing demands and alternative renewable energy sources on the power grid are causing instability and price volatility. Smart grid technology and programs are emerging to address these problems. In this paper we study demand-supply management under operational constraints and outage scheduling. We consider a model of an electricity market in which finite number of suppliers offer electricity. Each supplier has several power plants with different maximum capacity of production and different cost depending on the operational constraints. The response of the market to these offers is the quantities bought from the suppliers. The objective of the market is to satisfy the electricity demand at minimal cost. We develop a theoretical framework for cooperative production strategies between electricity producers. We formulate the problem as an optimal control problem under constraints. Using maximum principle techniques, we provide closed-form expressions of the joint production efforts between the electricity producers. Applying inf-convolution technique to the Hamiltonian we transform the multiple variable optimization problem into a single-variable optimization problem, reducing significantly the curse of dimensionality. In order to capture the random nature of most of the renewable energy sources, we introduce stochastic demand and stochastic production variabilities. We derive closed-form expressions using mean-field-type optimization techniques. The framework is shown to be flexible enough to include both risk-neutral and risk-sensitive behavior of a decision-maker when facing uncertainties. B Hamidou Tembine

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“…However, in most previous studies, it was assumed that firms cannot change their behaviour or the change in the strategic behaviour was modelled as an exogenous random parameter. Recently, Lagerlöf (2006) provided the conditions for the distribution of demand uncertainty such that the uniqueness of equilibrium is guaranteed, but only theoretically. Another problem stems from the fact that firms exhibit different attitudes towards uncertainty.…”

Section: Introductionmentioning

confidence: 99%

An empirical model of changing global competition in the shipbuilding industry

Lim¹

2013

Maritime Policy & Management

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We developed an empirical model to explain the changing global competition among major countries involved in the shipbuilding industry over the last three decades. In order to develop future strategies for not only shipbuilding companies but shipping companies and governments, it is necessary to understand the past logic of their competitive strategies. Using the real strategic behaviours and decision rules of shipbuilding companies derived through a literature survey and interviews, we developed a model using the Cournot oligopoly with Choquet Expected Utility (CEU) theory. Three national players, Japan, Korea and China, are supposed to be either optimistic or pessimistic, which allows us to incorporate the different attitude of the players into the demand uncertainty for our model. Competitive reaction functions are derived and compared with the estimation results via multiple regression with annual shipbuilding tonnage data. Our results provide strong evidence that the major players are bound to use simple rules for competitive quantity decisions, but change the rules completely when they become ineffective. In addition, the competitive behaviour of the players depends on both the degree of demand uncertainty and the different attitudes of the players towards uncertainty.

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Equilibrium Uniqueness in a Cournot Model with Demand Uncertainty

Cited by 15 publications

References 3 publications

On the existence of Bayesian Cournot equilibrium

On the existence of Bayesian Cournot equilibrium

Mean-field-type optimization for demand-supply management under operational constraints in smart grid

An empirical model of changing global competition in the shipbuilding industry

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