This paper discusses the way that different operational characteristics including existing capacity, scale economies, and production policy have an important influence on the capacity outcomes when firms compete in the market place. We formulate a game-theoretical model where each firm has an...

We consider a procurement auction, where each supplier has private costs and submits a stepped supply function. We solve for a Bayesian Nash equilibrium and show that the equilibrium has a price instability in the sense that a minor change in a supplier's cost sometimes result in a major change...

The service value proposition plays a key role in defining the most appropriate mix of components in service operations management. However, service companies often find it difficult to obtain a good understanding of how customers differentially value the service components that are offered by...

Forward sales is a credible commitment to aggressive spot market bidding, and it mitigates producers' market power in electricity markets. Still it can be profitable for a producer to make such a commitment if it results in a soft response from competitors in the spot market (strategies are...

Transport constraints limit competition and arbitrageurs' possibilities of exploiting price differences between goods in neighbouring markets, especially when storage capacity is negligible. We analyse this in markets where strategic producers compete with supply functions, as in wholesale...

This paper characterizes the Nash equilibrium in a pay-as-bid (discriminatory), divisible-good, procurement auction. Demand by the auctioneer is uncertain as in the supply function equilibrium model. A closed form expression is derived. Existence of an equilibrium is ensured if the hazard rate...