Search results for: Cournot oligopoly

Authors: Mattheos K. Protopapas, Elias B. Kosmatopoulos

Abstract:

An iterative algorithm is proposed and tested in Cournot Game models, which is based on the convergence of sequential best responses and the utilization of a genetic algorithm for determining each player-s best response to a given strategy profile of its opponents. An extra outer loop is used, to address the problem of finite accuracy, which is inherent in genetic algorithms, since the set of feasible values in such an algorithm is finite. The algorithm is tested in five Cournot models, three of which have convergent best replies sequence, one with divergent sequential best replies and one with “local NE traps"[14], where classical local search algorithms fail to identify the Nash Equilibrium. After a series of simulations, we conclude that the algorithm proposed converges to the Nash Equilibrium, with any level of accuracy needed, in all but the case where the sequential best replies process diverges.

Keywords: Best response, Cournot oligopoly, genetic algorithms, Nash equilibrium.

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Authors: A. Badri

Abstract:

Restructured electricity markets may provide opportunities for producers to exercise market power maintaining prices in excess of competitive levels. In this paper an oligopolistic market is presented that all Generation Companies (GenCos) bid in a Cournot model. Genetic algorithm (GA) is applied to obtain generation scheduling of each GenCo as well as hourly market clearing prices (MCP). In order to consider network constraints a multiperiod framework is presented to simulate market clearing mechanism in which the behaviors of market participants are modelled through piecewise block curves. A mixed integer linear programming (MILP) is employed to solve the problem. Impacts of market clearing process on participants- characteristic and final market prices are presented. Consequently, a novel multi-objective model is addressed for security constrained optimal bidding strategy of GenCos. The capability of price-maker GenCos to alter MCP is evaluated through introducing an effective-supply curve. In addition, the impact of exercising market power on the variation of market characteristics as well as GenCos scheduling is studied.

Keywords: Optimal bidding strategy, Cournot equilibrium, market power, network constraints, market auction mechanism

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Authors: Arūnas Burinskas

Abstract:

Although Europe is on the threshold of a new industrial revolution called Industry 4.0, many believe that this will increase the flexibility of production, the mass adaptation of products to consumers and the speed of their service; it will also improve product quality and dramatically increase productivity. However, as expected, all the benefits of Industry 4.0 face many of the inevitable changes and challenges they pose. One of them is the inevitable transformation of current competition and business models. This article examines the possible results of competitive conversion from the classic Bertrand and Cournot models to qualitatively new competition based on innovation. Ability to deliver a new product quickly and the possibility to produce the individual design (through flexible and quickly configurable factories) by reducing equipment failures and increasing process automation and control is highly important. This study shows that the ongoing transformation of the competition model is changing the game. This, together with the creation of complex value networks, means huge investments that make it particularly difficult for small and medium-sized enterprises. In addition, the ongoing digitalization of data raises new concerns regarding legal obligations, intellectual property, and security.

Keywords: Bertrand and Cournot Competition, competition model, Industry 4.0, industrial organization, monopolistic competition.

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