An Oligopolistic Electricity Model with Interdependent Market Segments


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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.

, 24 pages

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G-2006-07.pdf (300 KB)