Incentive Problem in Gas Transport Infrastructure Development on the Norwegian Continental Shelf

A holistic framework for the study of interdependence between electricity and gas sectors

“…It is suggested that the particular measures that each party decides to adopt depend on the deviation of current performance (or even of forecast performance) from the goals of the industry and government, among options available to them, given limitations due to industry structure and the regulatory regime in place. Approaches based on game theory, which have long been used to study competition and cooperation between companies, can also be used to study the complex interaction between the regulator and firms, and the resulting performance (Gilbert & Newbery, 1988;Shaton, 2014). The following sections discuss common regimes for the centralized and decentralized archetypes, as well as the objectives of the agents involved, and provide examples of the dynamics of industry/government regulation.…”