We propose a novel method to find Nash equilibria in games with binary decision variables by including compensation payments and incentive-compatibility constraints from non-cooperative game theory directly into an optimization framework in lieu of using first order conditions of a...

The paper at hand examines the power system costs when a coal tax or a fixed bonus for renewables is combined with CO2 emissions trading. It explicitly accounts for the interaction between the power and the gas market and identifies three cost effects: First, a tax and a subsidy both cause...