G-2006-07
An Oligopolistic Electricity Model with Interdependent Market Segments
Pierre-Olivier Pineau and Georges Zaccour
In this paper, we model a two-period electricity market with interrelated demand, where oligopolistic generators make investments in peak- and base-load capacities. Different prices are obtained in the two periods, and residential consumers can react to prices across demand periods. We characterize the Cournot equilibrium obtained as a function of price and cross-price effects and present a numerical illustration based on the Ontario (Canada) electricity market.
Published February 2006 , 24 pages