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The value of information in electricity investment games
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Oliveira, Fernando (Researcher in business) (2008) The value of information in electricity investment games. Energy Policy, Volume 36 (Number 7). pp. 2364-2375. doi:10.1016/j.enpol.2008.01.005 ISSN 0301-4215.
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Official URL: http://dx.doi.org/10.1016/j.enpol.2008.01.005
Abstract
In this paper we look at the assumptions behind a Cournot model of investment in electricity markets. We analyze how information influences investment, looking at the way common knowledge of marginal costs, expectations on the competitors' marginal costs, expectations on the level and duration of demand, and conjectures on the others' behavior, influence,the value of a project. We expose how the results are highly dependent on the assumptions used, and how the investment Nash-Cournot game with perfect and complete information implies such a degree of coordination between players that the outcome of the game would be classified by any regulation law as collusive behavior. Furthermore, we introduce the concept of Nash Value of Complete Information. As an example we use a stylized model of investment in liberalized electricity markets. (C) 2008 Elsevier Ltd. All rights reserved.
Item Type: | Journal Article | ||||
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Subjects: | H Social Sciences > HB Economic Theory H Social Sciences > HD Industries. Land use. Labor |
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Divisions: | Faculty of Social Sciences > Warwick Business School | ||||
Library of Congress Subject Headings (LCSH): | Capital investments -- Mathematical models, Electric utilities -- Costs, Game theory | ||||
Journal or Publication Title: | Energy Policy | ||||
Publisher: | Elsevier Ltd. | ||||
ISSN: | 0301-4215 | ||||
Official Date: | July 2008 | ||||
Dates: |
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Volume: | Volume 36 | ||||
Number: | Number 7 | ||||
Number of Pages: | 12 | ||||
Page Range: | pp. 2364-2375 | ||||
DOI: | 10.1016/j.enpol.2008.01.005 | ||||
Status: | Peer Reviewed | ||||
Publication Status: | Published | ||||
Access rights to Published version: | Restricted or Subscription Access |
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