A competitive electricity market has been established in many European countries including the Czech Republic. The electricity market includes a limited number of significant producers and traders, which can be described by oligopoly model. Since the electricity transmission and distribution are regulated, I consider two types of players performing in the electricity market: producers of electricity and traders, who buy electricity from producers and sell it to final customers. I derive oligopoly model with producers and traders "a la Cournot" and calculate a formula of equilibrium strategies. I use these theoretical findings to build a dynamic oligopoly model Ele. Ele is formulated as a mixed complementary problem and calibrated on data for the Czech Republic and neighbor states for several scenarios. The model was specified and calculated in GAMS software by the PATH solver. The results represent a Nash equilibrium. That means for individual producers: electricity generation, investment in new power plants construction and emission permits purchases. For traders the results are: equilibrium purchases, sales and cross-border transfers of electricity in each particular time period. Ele derives also equilibrium regional wholesale and retail electricity prices, emission permit prices and prices of cross-border auctions. Ele results point to an economic profitability of new nuclear power plants constructions. Further, I formulate a game in short-term electricity market, where I advise to Czech market participants, subjects of settlement, how much and in which circumstances to buy or sell electricity. Equilibrium results obtained through simulations based on the principle of a fictive game show that the current payment system of imbalance in the Czech Republic does not increase the risk of instability of electricity networks.

This thesis addresses a problem at the nexus of operations, strategy, and economics: in concentrated markets, on the one hand firms may need to expand capacity in order to improve their competitive position, and on the other they also seek to avoid industry excess capacity causing poor industry conditions to destroy the intended value creation. These considerations are opposite to each other. Too much capacity leads to underutilized resources and drives costs up. In contrast, too little capacity will limit the operation's capability to serve customers and earn revenues. The literature of the operations management and operations research fields on capacity expansion is concerned with normative perspectives to invoke optimization techniques. In this stream of research, competitive capacity expansion is not extensive. Operations related studies often ignore the effect of oligopolistic competition on investment activities but explicitly model practical operational environments. Conversely, the literature of the industrial organization and business strategy fields on strategic investment focuses on quantity/pricing competition in oligopoly markets, and is concerned with descriptive perspectives to invoke game-theoretic modeling, emphasizing the effect of imperfect competition. There is an extensive literature of economics on a subject of capacity investment in oligopolistic competition environments. However, economics-related studies do not often address the detailed operational environments. The thesis focuses on the following five complicated factors affecting the union of operations, strategy, and economics: existing capacity, economies of scale, realistic production strategy, strategic interaction, and demand uncertainty. We make two main contributions. First, we extend the current game-theoretic models of strategic capacity investment by explicitly considering existing capacity, scale economies, and realistic production rules, which are often considered in the operations literature. Under reasonable conditions, we are able to solve the proposed models in closed form. Our second contribution is to use the type of generic strategy as firms' decision variable rather than quantity, price, or timing, which is often used in oligopoly theory. After analyzing equilibrium behaviors in the proposed models, our findings are supported by many empirical observations.

<p>In most electricity markets, producers submit supply functions to a procurement uniform-price auction under uncertainty before demand has been realized. In the Supply Function Equilibrium (SFE), every producer commits to the supply function that maximises his expected profit given the bids of competitors. </p><p>The presence of multiple equilibria is a basic weakness of the SFE framework. Essay I shows that with (i) symmetric producers, (ii) perfectly inelastic demand, (iii) a reservation price (price cap), and (iv) capacity constraints that bind with a positive probability, a unique symmetric SFE exists. The equilibrium price reaches the price cap exactly when capacity constraints bind.</p><p>Another weakness is difficulty finding a valid asymmetric SFE with non-decreasing supply functions. Essay II shows that for firms with asymmetric capacity constraints but identical constant marginal costs there exists a unique and valid SFE. Equilibrium supply functions exhibit kinks as well as vertical and horizontal segments. The price at which the capacity constraint of a firm binds is increasing in the firm’s share of market capacity. The capacity constraint of the second largest firm binds when the market price reaches the price cap. Thereafter, the largest firm supplies its remaining capacity with a perfectly elastic segment at the price cap. Essay III presents a numerical algorithm that calculates a similar SFE for asymmetric firms with increasing marginal costs. </p><p>Essay IV derives the SFE of a pay-as-bid auction such as the balancing market for electric power in Britain. A unique SFE always exists if the demand’s hazard rate is monotonically decreasing, as for a Pareto distribution of the second kind. Assuming this probability distribution, the pay-as-bid procurement auction is compared to the SFE of a uniform-price procurement auction. Two theorems in Essay V prove that the demand-weighted average price is (weakly) lower in the pay-as-bid procurement auction. </p>

This dissertation consists of four self-contained essays primarily concerned with incorporating the objectives of real world top managers, as revealed by the available empirical evidence, in supergame-theoretic analyses of long-term competition between oligopolistic firms. The first essay, "Ownership, Control, and Collusion", considers how the separation between ownership and control affects firms' competitive attitudes when top managers have the preference for smooth profit streams revealed by the evidence on "income smoothing" and when managerial compensation has the low pay-performance sensitivity found in many empirical studies. In a similar fashion, the second essay, "Stock-Related Compensation and Product-Market Competition", deals with the effects of the apparently more aggressive managerial incentives linked to stock price (e.g. stock options), which have become increasingly common in the U.S., on long-term oligopolistic competition. In the third paper, "Debt as a (Credible) Collusive Device", shareholders’ commitments to reduce conflicts with debtholders by choosing a top manager with a highly valuable reputation or with "conservative" incentives are considered. These forms of commitment have been shown to reduce the (agency) cost of debt finance; this paper characterizes their effects on the relation between firms' capital structure and product market competition. The fourth paper, "Multimarket Contact, Concavity, and Collusion", addresses the relation between multimarket contact and firms’ ability to sustain collusive behavior in repeated oligopolies. It explores how this relation is affected by the strict concavity of firms’ objective function induced by managerial objectives and by other features of reality, discusses the effects of conglomeration and horizontal mergers, and extends the results to non-oligopolistic supergames. / <p>Diss. Stockholm : Handelshögskolan, 1999</p>

In most electricity markets, producers submit supply functions to a procurement uniform-price auction under uncertainty before demand has been realized. In the Supply Function Equilibrium (SFE), every producer commits to the supply function that maximises his expected profit given the bids of competitors. The presence of multiple equilibria is a basic weakness of the SFE framework. Essay I shows that with (i) symmetric producers, (ii) perfectly inelastic demand, (iii) a reservation price (price cap), and (iv) capacity constraints that bind with a positive probability, a unique symmetric SFE exists. The equilibrium price reaches the price cap exactly when capacity constraints bind. Another weakness is difficulty finding a valid asymmetric SFE with non-decreasing supply functions. Essay II shows that for firms with asymmetric capacity constraints but identical constant marginal costs there exists a unique and valid SFE. Equilibrium supply functions exhibit kinks as well as vertical and horizontal segments. The price at which the capacity constraint of a firm binds is increasing in the firm’s share of market capacity. The capacity constraint of the second largest firm binds when the market price reaches the price cap. Thereafter, the largest firm supplies its remaining capacity with a perfectly elastic segment at the price cap. Essay III presents a numerical algorithm that calculates a similar SFE for asymmetric firms with increasing marginal costs. Essay IV derives the SFE of a pay-as-bid auction such as the balancing market for electric power in Britain. A unique SFE always exists if the demand’s hazard rate is monotonically decreasing, as for a Pareto distribution of the second kind. Assuming this probability distribution, the pay-as-bid procurement auction is compared to the SFE of a uniform-price procurement auction. Two theorems in Essay V prove that the demand-weighted average price is (weakly) lower in the pay-as-bid procurement auction.

This dissertation explores the issues of mixed oligopoly, restructuring, and M&A that occurs in turn on the stages of policy set-up, preparation, and performing when the government attempt to privatize the state-owned enterprises (SOEs). On the policy set-up stage, private firms in domestic market are not necessary confined to originate at home country. Foreign private firms may establish an oversea subsidiary and create a mixed oligopoly market structure at home country. In addition, those foreign private firms may not passively accept all the trade policies that came from the government decision of home country. Mixed oligopoly competition between one domestic public firm and one subsidiary of foreign private firm is been formulated to investigate the following questions: (1) how the agents compete under the cases that home country government adopts policies such as corporate tax rate, repatriation tax rate, and partial offering public stocks; and the foreign private firm implements strategies such as vertical integration and transfer pricing; (2) the impact on social welfare and the decision of optimal public stock-offering ratio while home country government¡¦s policies and foreign private firm¡¦s strategies have changed. New findings include (1) Home country government can not maximize social welfare by simply adopting strategic policies; (2) For home country government, the best strategy for privatizing SOEs maybe partial privatization; (3) For home country government, ¡§mass privatization¡¨ should be avoided as the means of manipulating domestic market shares. On the preparation stage, an incentive scheme model is designed to analyze the governance mechanism for improving SOEs¡¦ situation. First, different types of SOEs are classified according to their own ability and the employees¡¦ attitude for privatization. By offering a sound device of incentive scheme, the government is able to strengthen the SOEs¡¦ ability and employees¡¦ desirability. Within a one-stage symmetric information game framwork, it proves that SOEs with high ability and their employees with high privatization desirability can implement the highest amount of public stock offering ratio. Next, it utilizes a two-stage asymmetric game model for discussing how to improve the SOEs¡¦ ability and how to encourage the employees to support privatization. By providing an incentive contract, the government not only can coerce the SOEs but also can inspire their employees to reveal their true information. The due process of public stock offering is able to strengthen the abilities of SOEs via ¡§restructuring¡¨ on the one hand, and to facilitate the issue of ¡§training subsidies¡¨ for hatching the entrepreneurship of employees on the other hand. Finally, it investigates the impact on public stock offering ratio for the amount of specific grants, and found that the more generosity of incentive contract, the higher the public stock offering ratio. On the performing stage, it adopts the incentive theorem to analyze the outcome of SOEs¡¦ privatization by inviting a named firm. The named firm takes over the SOEs through M&A for the purpose of long-term operation. In order to encourage the employees of the privatized company working more aggressively, the named firm comes up incentive schemes including bonus-sharing and Employees Stock Ownership Plan, ESOP. It found that whether there exists information asymmetry or not between the named firm and the employees of the privatized company will affect the following decision-makings: the level of the employees¡¦ effort, the willingness of the employees¡¦ stock-holding, and the achievement of the named firm¡¦s profit maximizing objective. In particular, it shows that the change of the contents of the incentive schemes will affect the bargaining outcomes between the named firm and the trade union of the SOEs on the issue of working conditions after privatization.

The present thesis aims to increase our understanding of the causes of separatism. The inspiration for this topic comes from the fact that separatist conflicts can become extremely destructive, and thus a better understanding of why they emerge may help us prevent much human suffering by pointing to ways in which separatism can be avoided. More specifically, the thesis aims to explain the link between separatism and regional development disparities. The argument presented is that inter-regional economic conflicts (such as about inter-regional fiscal redistribution) easily emerge between regions at different levels of development, and that under certain conditions, particularly prolonged recessions and austerity, such conflicts can become an important driver of separatist aspirations. This can happen in both poorer and richer regions. The thesis further argues that this entire process can only be fully understood if we analyse society through a class prism. Given that regional development disparities often lie at the root of inter-regional economic conflicts, one of the ways of avoiding such conflicts – and thus also separatism – would be to equalize regional development levels. In order to do so, however, we first need to understand why regional disparities emerge and persist. Focusing on capitalist countries, the thesis argues that the disparities emerge as a natural consequence of the operation of oligopolistic markets, which are the dominant market form in capitalism. Regional development policies are explored at length, and it is argued that they are generally insufficient to overcome the tendency of markets to produce regional disparities. All the topics in the thesis are explored at the general level and for a larger number of countries, but the main in-depth case study is of regional disparities in the United Kingdom and how they relate to Scottish separatism.

O objetivo principal deste trabalho écalcular o valor da perda de bem-estar do setor siderúrgico brasileiro, considerando os diferentes mercados relevantes, como o de aço bruto, laminados, vergalhões e ferro-gusa. Para alcançar este propósito foram estimadas diferentes equações de demanda para os referidos mercados relevantes para, então, encontrar as elasticidades-preço da demanda. O modelo teórico utilizado referente ao peso morto para mercados oligopolizados foi o de Daskin (1991). Tratandose do cálculo das elasticidades-preço, utilizaram-se modelos de equações simultâneas com o uso de variáveis instrumentais. O mercado siderúrgico é oligopolizado no mundo inteiro, incluindo o Brasil. As inúmeras fusões e aquisições ocorridas, principalmente após a desestatização do setor, contribuíram para a concentração do mercado. O mercado siderúrgico brasileiro apresentou um alto índice de concentração, principalmente no mercado de vergalhões onde apenas três grupos empresariais (Gerdau, Arcelor Mittal e Votorantim) controlam todo o mercado deste produto. Em um mercado altamente concentrado as firmas podem exercer poder de mercado e desta forma há perdas econômicas para a sociedade como um todo. As elasticidades-preço encontradas no trabalho refletem bem a estrutura do setor siderúrgico brasileiro, em que, todos os mercados relevantes analisados apresentaram baixos valores de elasticidade-preço, ou sejam, inelásticos às variações de preço. O mercado de vergalhões foi o mais inelástico se comparado aos demais mercados, além disso, os seus valores de peso morto em relação ao faturamento também foram os maiores, evidenciando uma forte perda de bem-estar. Apesar dos outros mercados relevantes terem apresentado valores de peso morto em relação ao faturamento do setor inferiores, os mesmos não foram desprezíveis. O mercado de aço bruto que neste estudo representa o mercado siderúrgico brasileiro como um todo (exceto o seguimento de ferro-gusa), por incorporar os demais mercados relevantes, é dominado pelos grupos empresariais Arcelor Mittal; Gerdau, Usiminas Cosipa e Companhia Siderúrgica Nacional - CSN, e também apresentou resultados indicativos de forte perda de bemestar, com alto valor de peso morto. Já o mercado de laminados, controlado pelos grupos Arcelor Mittal, Usiminas Cosipa, CSN e Gerdau, apresentou resultados muito próximos aos do aço bruto. O mercado de ferro-gusa, menos concentrado em comparação as demais, foi o que apresentou os menores valores de peso morto, o que era esperado, pois este mercado, apesar de ser dominado por quatro grandes grupos siderúrgicos (Arcelor Mittal, Usiminas Cosipa, CSN e Gerdau), é um mercado onde há a participação de inúmeros produtores de pequeno porte denominados guseiros. As conclusões deste trabalho mostram que o mercado siderúrgico brasileiro é muito concentrado e há o exercício do poder de mercado por parte das firmas participantes, ocasionando perda de bem-estar para sociedade brasileira. Espera-se que este estudo, ao apresentar os valores de perda de bem-estar, possacontribuir para a análise ou para elaboração de políticas públicas relacionadas ao setor em questão. / The main objective of this study was to calculate the value of the welfare loss for the Brazilian steel sector. Different relevant markets were analyzed, such as: crude steel, rolled steel, rebar and pig iron. Price-elasticities of demand were obtained by estimating different demand equations for each related market. The theoretical model proposed by Daskin (1991) was used to calculate the dead weight loss in oligopolistic markets. Elasticities were obtained by formulating the simultaneous equations model and using instrumental variables. Worldwide, steel market can be considered an oligolopy, as well as in Brazil. In the Brazilian market, mergers and acquisitions that happened after the privatization of the sector, contributed for the market concentration. The Brazilian steel market showed a high concentration ratio, especially in the rebar market where only three groups (Gerdau, Arcelor Mittal and Votorantim) control the entire Brazilian market for this product. In a highly concentrated market firms tend to exercise market power. Consequently, there are economic losses to the society. The price elasticities of demand that were found in this research highlight the structure of the Brazilian steel market. For all the relevant markets that were analyzed, there were found low values for elasticities. It shows that all the products are price-inelastic. The rebar market was found to be the more inelastic when compared to other markets. In addition, for this same market, the calculated values of dead weight loss related to sales were also higher. High welfare losses can be related to the high market concentration for this product. Even though other relevant markets have presented positive values of dead weight loss related to sales of the lower sector, these values were not negligible. The market for crude steel that was analyzed in this study represents the Brazilian steel market as a whole because it incorporates other relevant markets. Large groups, such as, Arcelor Mittal, Gerdau, Usiminas Cosipa and CSN dominate the market. The results analyzed for the crude steel indicate a strong welfare loss, with a high value of dead weight loss. The results for the rolled products market, dominated by Arcelor Mittal, Usiminas Cosipa, CSN e Gerdau, are close to those found for the crude steel market. The market for pig iron, which is less concentrated when compared to other markets, presented lower values of dead weight loss. This result was expected because although this sector is dominated by four big groups there are many other small companies also producing in this sector. According to the results, it can be concluded that the Brazilian steel market is highly concentrated what enables firms to exercise their market power, causing a welfare loss for the Brazilian society. It is expected that, by presenting values for the welfare loss in the steel market, this research can help in the analysis and development of public policies for this sector.

nÃo hà / O presente trabalho tem como objetivo principal identificar o efeito competitivo da fusÃo entre Sadia e PerdigÃo, no mercado de alimentos do Brasil. Como ambas as empresas possuem aÃÃes na Bolsa de Valores, um bom mÃtodo para verificar esse efeito competitivo à o Estudo de Eventos. Essa metodologia tem como mÃrito, a objetividade, podendo inferir sobre hipÃteses relativamente simples: se a fusÃo for prÃcompetitiva, os ditos retornos anormais das rivais Ãs firmas fusionadas apresentarÃo sinais negativos, caso contrÃrio, a fusÃo poderà ser considerada anticompetitiva. Para base de dados, usamos como fonte, o IBOVESPA, alÃm de dados da ECONOMÃTICA. O modelo economÃtrico à um tradicional MQO. Os retornos, dentro da trajetÃria normal dos ativos financeiros serÃo calculados a partir de uma janela de estimaÃÃo e, os retornos anormais serÃo calculados dentro da janela do evento. Testes serÃo feitos para verificar a significÃncia estatÃstica desses dados. Os resultados do trabalho mostram que a fusÃo nÃo pode ser considerada prÃcompetitiva, os quais sÃo consistentes com a decisÃo do CADE. / This study's main objective is to try to identify the competitive effect of the merger between Sadia and PerdigÃo in the food market in Brazil. Since both companies have shares in the Stock Exchange, a good method to check this competitive effect is by using the Event Study. This methodology has the merit objectivity and may result in relatively simple cases: if the merger is procompetitive , the abnormal returns of rivals of the merged firms showed negative signs, otherwise, the merger may be considered anticompetitive. For database, it was used as source the Ibovespa, and data ECONOMATICA. The econometric model is a traditional OLS. The returns within the normal trajectory of financial assets will be calculated from a estimation window and the abnormal returns are calculated within the event window. Tests will be done to check the statistical significance of the data. Results of the study show that the merger can not be considered procompetitive. Results consistent with the decision of CADE.

This Master’s thesis deals with the application of cooperative game theory for solving the problems of Cournot's oligopolies. The knowledge of oligopoly theory and game theory has been elaborated to build a model describing the behavior of companies at a market that meets the preconditions of Cournot's oligopoly. The definition of cooperative game is based on the -characteristic function, which takes into account, compared to classical methods, that companies which are not in the coalition are pursuing their own profits, not suppressing coalition positions. The properties of the resulting cooperative games are examined in detail, focusing on monotony and convexity. Several theorems about these properties have been derived and their economic interpretations are given. Also, the question of calculation of the -characteristic function using the best-reply dynamics algorithm is being solved, and its convergence for a given type of games is justified. The model is applied to data from the oil market, which is further characterized by the results of the cooperative game.