Muratore, Gabriella
[Technische Universiteit. Eindhoven]
In this paper we address the issue of finding efficient partial equilibria in markets with nonconvexities.
This is a problem that has intrigued generation of economists. Beside its theoretical
importance this issue is fundamental in energy markets which do not give the right price signals
and incentives to maintain existing and invest in new generating capacity. By considering a
competitive environment in which consumers maximize utility independently of other agents
actions while suppliers are profit maximizers given other market agents actions, we are able to
find efficient prices in markets with non-convexities. Based on this result we propose a design for
an energy-only market able to give investors the correct price signals.
Bibliographic reference |
Muratore, Gabriella. Equilibria in markets with non-convexities and a solution to the missing money phenomenon in energy markets. CORE Discussion papers ; 2008/6 (2008) 35 pages |
Permanent URL |
http://hdl.handle.net/2078.1/12658 |