2015/10/15 by Tobias Baltensperger, Rudolf Marcel Füchslin, Baltensperger, Tobias +6
Economics, Econometrics and Finance · Mathematics · #Climate Change Policy and Economics #Complementarity (molecular biology) #Computer science #Cournot competition #Econometrics #Economic theories and models #Economics #FOS: Mathematics #Market Dynamics and Volatility #Mathematical economics #Mathematics #Oligopoly #Optimization and Control (math.OC) #Parameter space #Space (punctuation) #Uniqueness #math.OC
paper · pdf · doi:10.48550/arxiv.1510.04473
arxiv created 2015/10/15 · openalex publication_date 2015/10/15 · arxiv updated 2015/10/16 · openalex created_date 2025/10/10 · openalex updated_date 2026/08/05
Spatial partial equilibrium models incorporating conjectural variations are\nwidely used to analyze the development of oligopolistic multi-agent markets,\nsuch as international energy and raw material markets. Although this model type\ncan produce multiple equilibria under commonly used assumptions, to the best of\nour knowledge, the consequences for the interpretation of the model results\nhave not yet been explored in detail. To this end, we derive a linear\ncomplementarity model for the gas market and discuss under which assumptions on\nthe model structure a component of the solution is unique. In particular, we\nfind that the gas flow between a trader and a consumer is unique whenever the\ntrader is modeled to exert market power in the consumer's market. We\ndemonstrate our findings by computing the extreme points of the polyhedral\nsolution space and show that erroneous conclusions could be drawn whenever only\none (arbitrary) point in the solution space is picked for interpretation.\nFurthermore, we discuss whether economically meaningful parameter value changes\nexist which would enforce uniqueness in all components of the solution.\n