Supply Function Equilibria in Oligopoly under Uncertainty

Klemperer, Paul; Meyer, Meghan L.

doi:10.2307/1913707

Cited by 1,113 publications

(859 citation statements)

References 17 publications

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“…These authors assume that firm have a continuously differentiable cost function and submit continuously differentiable bid functions to the pool and apply Klemperer and Meyer's (1989) results to obtain a range of equilibrium supply functions. Their analysis assumes that bids are fixe for a period during which demand shifts in a given interval.…”

Section: Introductionmentioning

confidence: 99%

Strategic bidding in electricity pools with short-lived bids: an application to the Spanish market

Garcı́a-Dı́az

Marı́n

2003

International Journal of Industrial Organization

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We generalize von der Fehr and Harbord's [Econ. J. 103 (1993) 531] multi-unit auction model for the case of a deterministic demand allowing for any technology mix and elastic demand in order to account for demand-side bidding. We obtain a general characterization of the equilibrium and show that this is bounded above by the Cournot equilibrium. We simulate the Spanish electricity pool and show that price-cost margins substantially increased with the 1996 merger that took the industry from a six-firm structure to its current four-firm structure. Our results show that, in terms of market power, this is similar to a nearly symmetric duopoly. The introduction of demand-side bidding is not likely to change this situation.JEL classificatio : L13; L94; K23

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Section: Introductionmentioning

confidence: 99%

Strategic bidding in electricity pools with short-lived bids: an application to the Spanish market

Garcı́a-Dı́az

Marı́n

2003

International Journal of Industrial Organization

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“…Klemperer and Meyer [1989] have sdhed light on this issue using the concept of supply -function equilibrium. In their model however, the price is not fully strategic in the sense that they are intemately related to supply.…”

Section: ) Introductionmentioning

confidence: 99%

Bertrand competition and Cournot outcomes: further results

Boccard¹,

Wauthy

2000

Economics Letters

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“…Nash equilibria in such settings are referred to as supply function equilibria (SFE) [15]. A corresponding sales auction version has been used to analyze how strategic bidding in treasury auctions is influenced by an uncertain amount of non-competitive bids [22].…”

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Mixed Strategies in Discriminatory Divisible-Good Auctions

2010

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Using the concept of market-distribution functions, we derive general optimality conditions for discriminatory divisible-good auctions, which are also applicable to Bertrand games and non-linear pricing. We introduce the concept of offer distribution function to analyze randomized offer curves, and characterize mixed-strategy Nash equilibria for pay-as-bid auctions where demand is uncertain and costs are common knowledge; a setting for which pure-strategy supply function equilibria typically do not exist. We generalize previous results on mixtures over horizontal offers as in Bertrand-Edgeworth games, but more importantly we characterize novel mixtures over partly increasing supply functions.

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Supply Function Equilibria in Oligopoly under Uncertainty

Cited by 1,113 publications

References 17 publications

Strategic bidding in electricity pools with short-lived bids: an application to the Spanish market

Strategic bidding in electricity pools with short-lived bids: an application to the Spanish market

Bertrand competition and Cournot outcomes: further results

Mixed Strategies in Discriminatory Divisible-Good Auctions

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