technological leadership and persistence of monopoly under endogenous entry static versus dynamic analysis abstract we build a dynamic oligopoly model with endogenous entry in which a particular firm leader invests in an innovation process facing the subsequent entry of other firms followers we identify conditions that make it optimal for the leader in the initial oligopoly situation to undertake pre emptive r d investment strategic predation eventually resulting in the elimination of all followers compared to a static model the dynamic one provides new insights into the leader s intertemporal investment choice its optimal decision making and the dynamics of the market structure over time we also contrast the leader s investment decisions with those of the social planner

experience with pjm market operation system design and implementation this paper outlines the fundamental features of the pjm day ahead energy market and real time energy market the day ahead market is based on a voluntary least cost security constrained unit commitment and dispatch with several fundamental design features that ensure the market is robust and competitive this market offers market participants the option to lock in energy and transportation charges at binding day ahead prices the flexibility of the day ahead market rules provide all participants with equal access to the day ahead market through consistent price signals and by providing all participants with the ability to submit virtual demand bids and virtual supply offers these mechanisms promote liquidity in the markets economic incentives drive the convergence of the day ahead and real time market prices the real time energy market is based on security constrained economic dispatch and is cleared based on the actual system operating conditions the lmp based markets support reliable grid operations through efficient price signals

deliverable robust ramping products in real time markets the increasing penetration of variable energy resources has led to more uncertainties in power systems flexible ramping products frp have been adopted by several electricity markets to manage the uncertainties we reveal that neglected line congestion for frp may not only cause infeasibility but also result in a failure of cost recovery to address the deliverability issues on frp this paper proposes a new concept deliverable robust ramping products drrp in real time markets the drrp includes generation ramping reserve and generation capacity reserve the drrp is deliverable and immunized against any predefined uncertainty it also fully addresses the bid cost recovery issue caused by the line congestion in existing frps the prices of drrp are derived within the affine adjustable robust optimization aaro framework these prices can be used to identify valuable reserves among available reserves and quantify the values of flexible resources that provide reserves this paper also proposes a general approach to obtaining the time decoupled prices for drrp and generation which can be used for the market settlement of the first interval only in real time markets simulations on a 3 bus system and the ieee 118 bus system are performed to illustrate the concept of drrp and the advantages of drrp compared to existing frp

trade unions investment and employment the implications of long term wage contracts and investment in capital on non cooperative wage bargaining between a firm and a union are analysed the union maximises a utilitarian utility function and the firm faces a neoclassical investment problem with internal adjustment costs the monopoly union outcomes with binding contracts is time inconsistent because the union has an incentive to renege on announced low wage strategies once the capital stock has been accumulated the monopoly union outcome without binding contracts leads to credible strategies which correspond to higher wages and lower levels of employment investment and the capital stock efficient contracts give rise to higher employment than monopoly union outcomes whether with or without long term wage contracts the results are illustrated with a numerical example finally when the game between the union and firm is repeated reputational equilibira provide a solution to the problem of time inconsistency

robust security constrained unit commitment and dispatch with recourse cost requirement with increasing renewable energy resources price sensitive loads and electric vehicle charging stations in the power grid uncertainties on both power generation and consumption sides become critical factors in the security constrained unit commitment scuc problem recently worst scenario based robust optimization approaches are employed to consider uncertainties this paper proposes a non conservative robust scuc model and an effective solution approach the contributions of this paper are three fold first the commitment and dispatch solution obtained in this paper can be directly used in day ahead market as it overcomes two issues conservativeness and absence of robust dispatch which are the two largest obstacles to applying robust scuc in real markets secondly a new concept recourse cost requirement similar to reserve requirement is proposed to define the upper bound of re dispatch cost when uncertainties are revealed thirdly a novel decomposition approach is proposed to effectively address the well known computational challenge in robust approaches simulation results on the ieee 118 bus system validate the effectiveness of the proposed novel model and solution approach

stochastic security constrained unit commitment this paper presents a stochastic model for the long term solution of security constrained unit commitment scuc the proposed approach could be used by vertically integrated utilities as well as the isos in electricity markets in this model random disturbances such as outages of generation units and transmission lines as well as load forecasting inaccuracies are modeled as scenario trees using the monte carlo simulation method for dual optimization coupling constraints among scenarios are relaxed and the optimization problem is decomposed into deterministic long term scuc subproblems for each deterministic long term scuc resource constraints represent fuel and emission constraints in the case of vertically integrated utilities and energy constraints in the case of electricity markets lagrangian relaxation is used to decompose subproblems with long term scuc into tractable short term mip based scuc subproblems without resource constraints accordingly penalty prices lagrangian multipliers are signals to coordinate the master problem and small scale subproblems computational requirements for solving scenario based optimization models depend on the number of scenarios in which the objective is to minimize the weighted average generation cost over the entire scenario tree in large scale applications the scenario reduction method is introduced for enhancing a tradeoff between calculation speed and accuracy of long term scuc solution numerical simulations indicate the effectiveness of the proposed approach for solving the stochastic security constrained unit commitment

policy based reserves for power systems this paper introduces the concept of affine reserve policies for accommodating large fluctuating renewable in feeds in power systems the approach uses robust optimization with recourse to determine operating rules for power system entities such as generators and storage units these rules or policies establish several hours in advance how these entities are to respond to errors in the prediction of loads and renewable infeeds once their values are discovered affine policies consist of a nominal power schedule plus a series of planned linear modifications that depend on the prediction errors that will become known at future times we describe how to choose optimal affine policies that respect the power network constraints namely matching supply and demand respecting transmission line ratings and the local operating limits of power system entities for all realizations of the prediction errors crucially these policies are time coupled exploiting the spatial and temporal correlation of these prediction errors affine policies are compared with existing reserve operation under standard modeling assumptions and operating cost reductions are reported for a multi day benchmark study featuring a poorly predicted wind infeed efficient prices for such policy based reserves are derived and we propose new reserve products that could be traded on electricity markets

firm expansion size spillovers and market dominance in retail chain dynamics we develop and estimate a dynamic game of strategic firm expansion and contraction decisions to study the role of firm size in future profitability and market dominance modeling firm size is important because retail chain dynamics are more richly driven by expansion and contraction than de novo entry or permanent exit additionally anticipated size spillovers may influence the strategies of forward looking firms making it difficult to analyze the effects of size without explicitly accounting for these in the expectations and hence decisions of firms expansion may also be profitable for some firms while detrimental for others thus we explicitly model and allow for heterogeneity in the dynamic link between firm size and profits as well as potential for persistent brand effects through firm specific unobservable factors as a methodological contribution we surmount the hurdle of estimating the model by extending a two step procedure that circumvents solving the game the first stage combines semipar

simpler is better predicting consumer vehicle purchases in the short run abstract when agencies such as the us environmental protection agency epa establish future greenhouse gas emissions standards for new vehicles forecasting future vehicle purchases due to changes in fuel economy and prices provides insight into regulatory impacts we compare predictions from a nested logit model independently developed for us epa to a simple model where past market share predicts future market share using data from model years 2008 2010 and 2016 the simple model outperforms the nested logit model for all goodness of prediction measures for both prediction years including changes in vehicle price and fuel economy increases bias in forecasted market shares this bias suggests price increases are correlated with unobserved increases in vehicle quality changes in preferences or brand specific changes in market size but not cost pass through for 2010 past shares predict better than a nested logit model despite a major shock the economic disruption caused by the great recession observed share changes during this turbulent period may offer upper bounds for policy changes in other contexts the largest observed change in market share across the two horizons is 6 6 for manufacturers in 2016 and 3 4 for an individual vehicle in 2010

scheduling and pricing for expected ramp capability in real time power markets higher variable renewable generation penetrations are occurring throughout the world on different power systems these resources increase the variability and uncertainty on the system which must be accommodated by an increase in the flexibility of the system resources in order to maintain reliability many scheduling strategies have been discussed and introduced to ensure that this flexibility is available at multiple timescales to meet variability that is the expected changes in system conditions two recent strategies have been introduced time coupled multi period market clearing models and the incorporation of ramp capability constraints to appropriately evaluate these methods it is important to assess both efficiency and reliability but it is also important to assess the incentive structure to ensure that resources asked to perform in different ways have the proper incentives to follow these directions which is a step often ignored in simulation studies we find that there are advantages and disadvantages to both approaches we also find that look ahead horizon length in multi period market models can impact incentives this paper proposes scheduling and pricing methods that ensure expected ramps are met reliably efficiently and with associated prices based on true marginal costs that incentivize resources to do as directed by the market case studies show improvements of the new method

investment profit sharing and the degree of centralization abstract this paper examines monopoly unions which are strong enough to use two part tariffs i e basic wages plus profit shares it is shown that decentralization in bargaining increases the total pay per worker and lowers the levels of capital stock and income

market share dynamics and the persistence of leadership debate this paper introduces a novel analysis of the classic persistence of leadership question and applies it to a newly constructed dataset for japanese manufacturing the analysis rests on an appeal to an empirical scaling relationship between current market share and the variance of changes in market share this relationship provides a powerful model selection criterion for candidate models of market share dynamics it also makes it feasible even in small datasets to test directly for the properties of the first passage times corresponding to loss of leadership

contingency constrained reserve requirements in joint energy and ancillary services auction this paper presents a security constrained unit commitment model for energy and ancillary services auction which can be used by an iso to optimize reserve requirements in electricity markets the proposed day ahead algorithm determines reserve requirements by simulating contingencies rather than specifying the requirements as fixed system constraints to address the computational complexity the original auction problem is decomposed into a master problem for solving unit commitment and subproblems for considering network security constraints numerical examples show that the proposed joint auction model can clear energy and ancillary services bids simultaneously while minimizing the total operating cost and satisfying transmission security constraints

incorporating post zonal reserve deployment transmission constraints into energy and ancillary service co optimization this paper presents a new approach implemented in miso day ahead and real time energy and ancillary service market clearing processes to address the reserve deliverability issue in this approach miso enhanced the co optimization process to incorporate post zonal reserve deployment transmission constraints reserves are procured within the co optimization to meet both market wide reserve requirements and ensure their deliverability on a zonal basis as a result zonal market clearing prices mcps for reserves can properly reflect the effects of zonal reserve deployment on transmission constraints under consideration

the persistence of market leadership evidence from japan this article explores the persistence of market leadership in japanese manufacturing industries over the period 1975 2004 by applying survival data techniques we examine how long market leadership persists and how the duration of market leadership varies according to industry specific characteristics our findings indicate that market leaders maintain their leadership positions for on average 20 years from 1975 in japanese manufacturing industries we provide evidence that market leadership tends to persist in capital intensive and legally cartelized industries whereas it is less likely to persist in demand volatile r d intensive and import intensive industries copyright 2009 the author 2009 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

security constrained unit commitment for simultaneous clearing of energy and ancillary services markets this paper introduces a security constrained unit commitment scuc model with emphases on the simultaneous optimization of energy and ancillary services markets benders decomposition is used to decouple the scuc into a unit commitment uc master problem and hourly network security checking subproblems lagrangian relaxation is used to decouple the uc problem into individual single unit commitment problems dynamic programming is used to find the optimal commitment decision a simultaneous marginal curve algorithm is proposed to find the optimal values of energy and ancillary services a six bus system with three units and the ieee 118 bus system with 54 units are analyzed to illustrate the proposed model

an extreme point subdifferential method for convex hull pricing in energy and reserve markets part i algorithm structure prices in electricity markets are given by the dual variables associated with the supply demand constraint in the dispatch problem however in unit commitment based day ahead markets these variables are not easy to obtain a common approach relies on re solving the dispatch problem with the commitment decisions fixed and utilizing the associated dual variables this avenue may lead to inadequate revenues to generators which has led to the introduction of uplift payments made by the market operator for further compensating the generators an alternative pricing mechanism known as convex hull pricing has been proposed to reduce or eliminate uplift payments computation of these prices requires the global maximization of an associated lagrangian dual problem in this paper we present an extreme point based procedure for obtaining a global maximizer unlike standard subgradient schemes where an arbitrary subgradient is used we present an extreme point subdifferential epsd algorithm this is a novel technique in which the steepest ascent direction is constructed by solving a continuous quadratic program the epsd algorithm initiates a move along this direction employing an a priori constant steplength with the intent of reaching the boundary of the face a backtracking scheme selects a steplength that ensures descent with respect to a suitably defined merit function as most electricity markets today co optimize energy and reserves an extension of the proposed convex hull pricing algorithm is provided for such integrated markets under suitable assumptions we compare outcomes of energy only and energy reserve co optimized markets under different pricing and uplift rules in these examples pricing rules have a major impact on the total payment while the uplift payment only accounts for a small portion of it we also observe that it remains unclear whether marginal cost pricing or convex hull pricing leads to higher total payment

efficiency wages and local versus central wage bargaining abstract a simple efficiency wage model is extended to allow for the presence of unions the presence of unions aggravates the unemployment caused by efficiency wage considerations provided the labour demand elasticity is not too much larger than one local firm level wage bargaining gives a higher negotiated wage than central wage bargaining implying higher unemployment under local wage bargaining than under central wage bargaining

how many firms should be leaders beneficial concentration revisited we investigate how the number of stackelberg leaders and followers aects economic welfare first we discuss the model with m leaders and n m followers compete in a homogeneous good market daughety 1990 nds that under constant marginal costs the stackelberg model m2 0 n yield a higher welfare than the cournot model m 0 or

on ex post pricing in the real time electricity market this paper proposes a new framework in calculating the ex post prices for the spot electricity market the proposed method finds a set of prices that are as consistent as possible with the actual outputs of resources correctly following their dispatch instructions two alternative consistency metrics are proposed in the paper one measures the difference between the actual performance of an individual resource and its bid based profit maximizing response to the ex post prices in a perfectly competitive market another measures the difference between the ex post price and the price that supports the actual response of an individual resource compared to the existing approaches adopted in the real time electricity markets in the u s the proposed method solves the ex post energy and ancillary service prices directly and simultaneously it does not require heuristics that are hard to justify and has a much clear definition for the pricing problem than the existing approaches do moreover the proposed approach is flexible in the price control required by the market operators numerical examples are presented to further demonstrate the validity of this approach

uncertainty marginal price transmission reserve and day ahead market clearing with robust unit commitment the increasing penetration of renewable energy in recent years has led to more uncertainties in power systems these uncertainties have to be accommodated by flexible resources i e upward and downward generation reserves in this paper a novel concept uncertainty marginal price ump is proposed to price both the uncertainty and generation reserve at the same time the energy is priced at locational marginal price lmp a novel market clearing mechanism is proposed to credit the generation and reserve and to charge the load and uncertainty within the robust unit commitment in the day ahead market we derive the umps and lmps in the robust optimization framework ump helps allocate the cost of generation reserves to uncertainty sources we prove that the proposed market clearing mechanism leads to partial market equilibrium we find that transmission reserves must be kept explicitly in addition to generation reserves for uncertainty accommodation we prove that transmission reserves for ramping delivery may lead to financial transmission right ftr underfunding in existing markets the ftr underfunding can be covered by congestion fund collected from uncertainty payment in the proposed market clearing mechanism simulations on a six bus system and the ieee 118 bus system are performed to illustrate the new concepts and the market clearing mechanism

convex hull pricing in electricity markets formulation analysis and implementation challenges recent widespread interest in convex hull pricing has not been accompanied by an equally broad understanding of the method this paper seeks to narrow the gap between enthusiasm and comprehension the connection between convex hull pricing and basic electricity market clearing processes is clearly developed and a new formulation of the pricing problem is presented from this formulation several important consequences of the method are derived and discussed some counterintuitive properties of convex hull pricing are highlighted and demonstrated with simple examples it is hoped that this paper will spur additional research on convex hull pricing so that an informed judgment can be made regarding its costs and benefits