Limit pricing and entry game of renewable energy firms into the energy sector

Semmler W, Di Bartolomeo G, Fard BM, Braga JP (2022)
Structural Change and Economic Dynamics 61: 179-190.

Zeitschriftenaufsatz | Veröffentlicht | Englisch
 
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Autor*in
Semmler, WilliUniBi; Di Bartolomeo, Giovanni; Fard, Behnaz Minooei; Braga, Joao Paulo
Abstract / Bemerkung
Governments attempt to provide the energy sector with incentives to replace old technologies with new renewable energy ones as the most effective way to combat climate change. Yet, in the energy sector prevail fossil fuel incumbents that might inhibit renewable energy entrants. Our paper provides a game theoretic stylization of competition between those two types of firms. Incumbents set prices, and entrants respond with quantity adjustments. In the context of a dynamic limit pricing model, we study the entry dynamics in a market in which the dominant firms (fossil fuel energy suppliers) face the entry of a group of competitive fringe firms (renewable energy suppliers) when the dominant firms have easier access to financial markets but, the fringe firms fund their expansion with internal finance. We also investigate the effect of the public support for renewable energy firms through subsidies. Our model is built on Judd and Peterson (1986, JET ), but our solutions are obtained through a non-linear model predictive control (NMPC) algorithm. By this technique, we can predict the outcome of the competition between incumbents and entrants and the impact of financial and fiscal policies considering moving-horizon strategies.(c) 2022 Elsevier B.V. All rights reserved.
Stichworte
Global warming; Renewable energy; Limit pricing; Strategic entry game; and non-linear model predictive control
Erscheinungsjahr
2022
Zeitschriftentitel
Structural Change and Economic Dynamics
Band
61
Seite(n)
179-190
ISSN
0954-349X
eISSN
1873-6017
Page URI
https://pub.uni-bielefeld.de/record/2963012

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Semmler W, Di Bartolomeo G, Fard BM, Braga JP. Limit pricing and entry game of renewable energy firms into the energy sector. Structural Change and Economic Dynamics . 2022;61:179-190.
Semmler, W., Di Bartolomeo, G., Fard, B. M., & Braga, J. P. (2022). Limit pricing and entry game of renewable energy firms into the energy sector. Structural Change and Economic Dynamics , 61, 179-190. https://doi.org/10.1016/j.strueco.2022.01.008
Semmler, W., Di Bartolomeo, G., Fard, B. M., and Braga, J. P. (2022). Limit pricing and entry game of renewable energy firms into the energy sector. Structural Change and Economic Dynamics 61, 179-190.
Semmler, W., et al., 2022. Limit pricing and entry game of renewable energy firms into the energy sector. Structural Change and Economic Dynamics , 61, p 179-190.
W. Semmler, et al., “Limit pricing and entry game of renewable energy firms into the energy sector”, Structural Change and Economic Dynamics , vol. 61, 2022, pp. 179-190.
Semmler, W., Di Bartolomeo, G., Fard, B.M., Braga, J.P.: Limit pricing and entry game of renewable energy firms into the energy sector. Structural Change and Economic Dynamics . 61, 179-190 (2022).
Semmler, Willi, Di Bartolomeo, Giovanni, Fard, Behnaz Minooei, and Braga, Joao Paulo. “Limit pricing and entry game of renewable energy firms into the energy sector”. Structural Change and Economic Dynamics 61 (2022): 179-190.

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