Hydroelectric Generators Competing in Cascades*
| Autor: | Daniel Monte, Rodrigo Moita |
|---|---|
| Jazyk: | angličtina |
| Rok vydání: | 2020 |
| Předmět: |
Upstream (petroleum industry)
Hydroelectric generation Electricity markets hydroelectric generation dynamic games Competition (economics) Intervention (law) Economics as a science Downstream (manufacturing) Benchmark (computing) Economics Production (economics) General Economics Econometrics and Finance Duopoly HB71-74 Industrial organization |
| Zdroj: | Revista Brasileira de Economia v.74 n.1 2020 Revista Brasileira de Economia Fundação Getulio Vargas (FGV) instacron:FGV Revista Brasileira de Economia, Vol 74, Iss 1, Pp 49-63 (2020) |
| Popis: | Hydroelectric generation is the main source of energy production in many countries. When firms operate in the same river, or in cascades, the output of an upstream firm is the input of its downstream rival. We build a dynamic stochastic duopoly model of competition in cascades and show that the decentralized market is inefficient when rain is frequent. However, at the critical times when rain is infrequente the market allocation is efficient. In an extension of our benchmark model, we show that regulatory intervention might be necessary if peak prices are sufficiently higher than off-peak prices. In such cases, upstream firms delay production in off-peak times, limiting their rival downstream generators’ production in peak times. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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