This study uses an agent-based test bed (“AMES”)to investigate separation and volatility of locational marginalprices (LMPs) in an ISO-managed restructured wholesale powermarket operating over an AC transmission grid. Particular attentionis focused on the dynamic and cross-sectional response...

In April 2003 the U.S. Federal Energy Regulatory Commission proposed a complicated marketdesign – the Wholesale Power Market Platform (WPMP) – for common adoption byall U.S. wholesale power markets. Versions of the WPMP have been implemented in NewEngland, New York, the mid-Atlantic states,...

The EU Directive 2003/87/EC for the introduction of a European emission trading system has leftthe task of allocating the emission allowances mainly to the member states. In Germany the details of theallocation method are laid down in the Allocation Act (ZuG 2007). One central element of the...

We extend Bresnahan and Reiss’s (1991) model of local oligopoly to allow firm entry and exit over time.In our framework, entrants have to incur sunk costs in order to enter a market. After becomingincumbents, they disregard these entry costs in deciding whether to continue operating or to...

We consider the plant location decision of a multinational, which has the option to invest in a more or aless technologically advanced country. We find that in the absence of exporting by the local firms, themultinational will invest in the country lagging behind, unless the firms in that...

The common prior assumption asserts that the beliefs of agents in different states of theworld are their posteriors based on a common prior and possibly some private signal. Commonpriors are pervasive in most economic models of incomplete information, oligopoly models withasymmetrically informed...