The short-run approach to long-run equilibrium in competitive markets : a general theory with application to peak-load pricing with storage
Author(s)
Bibliographic Information
The short-run approach to long-run equilibrium in competitive markets : a general theory with application to peak-load pricing with storage
（Lecture notes in economics and mathematical systems, 684）
Springer, c2016
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Note
Includes bibliographical references (p. 193-195)
Description and Table of Contents
Description
The authors present a new formal framework for finding the long-run competitive market equilibrium through short-run equilibria by exploiting the operating policies and plant valuations. This "short-run approach" develops ideas of Boiteux and Koopmans. Applied to the peak-load pricing of electricity generated by thermal, hydro and pumped-storage plants, it gives a sound and practical method of valuing the fixed assets-in this case, the river flows and the geological sites suitable for reservoirs. Its main mathematical basis is the producer's short-run profit maximization programme and its dual; their solutions have relatively simple forms that can greatly ease the fixed-point problem of solving for the general equilibrium. Since the optimal values (profit and cost functions) are usually nondifferentiable-this is so when there are joint costs of production such as capacity constraints-nonsmooth calculus is employed to resolve long-standing discrepancies between textbook theory and industrial reality by giving subdifferential extensions of basic results of microeconomics, including the Wong-Viner Envelope Theorem.
Table of Contents
Introduction.- Peak-load pricing with cross-price independent demands: a simple illustration.- Characterizations of long-run producer optimum.- Short-run profit approach to long-run market equilibrium.- Short-run approach to electricity pricing in continuous time.- Existence of optimal quantities and shadow prices with no duality gap.- Production techniques with conditionally fixed coefficients.- Conclusions.
by "Nielsen BookData"