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This paper contributes to the literature that postulates a relationship between income inequality and the relative importance of "market" and "organization" in the direction of resources. The paper emphasizes that both are endogenous; therefore, the empirical associations observed in the empirical data between inequality measures and production organization variables cannot be interpreted as indicative of causal relationships. The paper solves for the composition and size of occupational groups, the distribution of firm size, and the distribution of income as market equilibrium outcomes of an occupational choice economy, and performs a comparative static analysis. We find that the interaction between cross‐economy differences in the distribution of general skills in the labor force and the loss of control in the supervision of workers by managers can explain the empirical regularities observed in the relationship between the organization of production (distribution of firm size) and income inequality (distribution of labor income). This explanation of the empirical regularities differs from others proposed in the literature, such as those based on institutional constraints or the market power of firms. [ABSTRACT FROM AUTHOR]

We studied a supply chain consisting of multiple suppliers and multiple retailers. We use the Cournot–Stackelberg game, the Market–Stackelberg game, and the Market–Nash game to simulate the situation where the upstream seller's market dominance power gradually decreases while the downstream buyer's market power increases. The equilibrium decision and supply chain performance under the three models are compared and analyzed, as well as their responses to external market changes such as demand fluctuation and market competition intensity. The research shows that (1) in a seller-dominated supply chain, the increase in buyer power reduces market equilibrium production and wholesale price; (2) in the face of strong demand fluctuations, equivalent power between upstream and downstream can contribute to the stabilization of production and wholesale prices; (3) when market demand fluctuation is small, market power brings a higher profit level, and supply chain participants would like to actively compete for market power. However, when the demand fluctuates greatly, the profit advantage brought by market dominance is no longer significant, and there is no need to spend much to fight for market dominance; (4) the fierce competition of upstream suppliers will induce upstream to give up the competition for market dominance, and make the market power less attractive to downstream retailers. While the fierce horizontal competition downstream will stimulate both suppliers and retailers to actively compete for market power, (5) sufficient market competition will improve total supply chain profit, so encouraging competition is conducive to the overall economic development of society. [ABSTRACT FROM AUTHOR]

The implementation of renewable portfolio standards (RPS) and tradable green certificate schemes will exert significant influences on the market equilibrium outcomes and generation firms' strategic behaviors. To quantitatively investigate these influences, firstly, considering the difference in power generation cost and the uncertainty of renewable energy power generation, the equilibrium model for various trade subjects in the electricity market is established. Secondly, the nondominated sorting genetic algorithm II is adopted for solving the equilibrium model to find well-distributed Pareto-optimal solutions. Finally, the grey relational projection method is used to calculate the priority membership of each decision-making scheme so as to determine the optimal compromise solution. The simulation focuses on analyzing the impact of RPS on the equilibrium results and market behavior of power generators and introduces the Lerner index to quantify the market power of generators. The results show that: (1) An increase in the quota ratio can effectively increase power generation in renewable energy generators. The game between thermal power generators and renewable energy generators raises the prices of both markets at the same time. (2) Improving the forecasting accuracy is conducive to alleviating the market power behavior of various power generators, thereby ensuring the healthy operation of the power market. [ABSTRACT FROM AUTHOR]

Market power in water markets can be modeled as simultaneous quantity competition on a river structure and analyzed by applying social equilibrium. In an example of a duopoly water market, we argue that the lack of backward induction logic implies that the upstream supplier foregoes profitable strategic manipulation of water to the downstream supplier. To incorporate backward induction, we propose the Stackelberg social equilibrium concept. We prove the existence of Stackelberg social equilibrium in duopoly water markets with an upstream–downstream river structure and derive it in the example of a duopoly market. [ABSTRACT FROM AUTHOR]

Market power is a dominant feature of many modern electricity markets with an oligopolistic structure, resulting in increased consumer cost. This work investigates how consumers, through demand response (DR), can mitigate against market power. Within DR, our analysis particularly focusses on the impacts of load shifting and self-generation. A stochastic mixed complementarity problem is presented to model an electricity market characterised by an oligopoly with a competitive fringe. It incorporates both energy and capacity markets, multiple generating firms and different consumer types. The model is applied to a case study based on data for the Irish power system. The results demonstrate how DR can help consumers mitigate against the negative effects of market power and that load shifting and self-generation are competing technologies, whose effectiveness against market power is similar for most consumers. We also find that DR does not necessarily reduce emissions in the presence of market power. [ABSTRACT FROM AUTHOR]

Using Hart (1979, 1985) and Mas-Colell (1984), I defend the idea that the standard ownership structure is somewhat problematic in general equilibrium models of monopolistic competition because profit maximization is not a justified objective of the firm. I then advocate that a solution to overcome this methodological issue is when ownership is disproportionally concentrated among households. [ABSTRACT FROM AUTHOR]

We assess how firms' incentives to operate and invest in energy storage depend on the market structure. For this purpose, we characterize equilibrium market outcomes allowing for market power in storage and/or production, as well as for vertical integration between storage and production. Market power reduces overall efficiency through two channels: It induces an inefficient use of the storage facilities, and it distorts investment incentives. The worst outcome for consumers and total welfare occurs under vertical integration. The results are key to understanding how to regulate energy storage, an issue which is critical for the deployment of renewable energies. [ABSTRACT FROM AUTHOR]

This article investigates cap-and-trade markets in the presence of both political and market distortions. We create a model where dominant firms have the ability to rent seek for a share of pollution permits as well as influence the market equilibrium with their choice of permit exchange because of market power. We derive the equilibrium and show the interaction of these two distortions has consequences for the resulting marginal inefficiency—the extent to which a re-allocation of permits between firms can reduce equilibrium abatement costs. We find that if the regulator is not very responsive to rent seeking then marginal inefficiency reduces relative to the case without rent seeking. When the regulator is very responsive to rent seeking, if dominant rent-seeking firms are all permit buyers (sellers) then marginal inefficiency reduces (increases) relative to the case without rent seeking. [ABSTRACT FROM AUTHOR]

• Modeling GenCos' CW in market equilibrium problem considering SCGMS. • Obtaining oligopolistic generation and maintenance schedules, consumption of loads, and nodal prices based on KKT conditions. • Capacity withholding analysis of GenCos using two novel indices WTI and RWLI. • Considering wealth transfer from loads to GenCos to model GenCos' CW impacts on electricity markets. • Introducing RWLI to model GenCos' CW by measuring loss of social welfare. The analysis of capacity withholding (CW) plays an important role in monitoring of the market power. One way of CW in oligopoly electricity markets is the strategic maintenance of generation companies. In this paper, a security-constrained generation maintenance scheduling is proposed using two sets of comparison indices to analyze the CW from the nodal and global points of view. The relative welfare loss index measures the market inefficiency in the form of social welfare loss relative to efficient markets, while the wealth transfer index enables the analysis of wealth transfer from customers to GenCos due to the CW. It is revealed that these indices identify the additional strategic leeway of GenCos due to the maintenance scheduling. Consequently, they can be used by the regulators and independent system operators for the evaluation of CW in the presence of GenCos' strategic maintenance. Focusing on changes in generation, nodal prices, and social welfare, the modified versions of IEEE 30 and 118-bus test systems are provided to demonstrate the robustness and effectiveness of the proposed indices. It is revealed that the price and welfare based measures detect the CW in the context of maintenance scheduling whereas the mere analysis of quantities is not sufficient. [ABSTRACT FROM AUTHOR]

The penetration of renewables on the demand side has recently attracted a large amount of attention. Its dual identity has an important impact on the competition between power producers and market dispatching. This study analyzed the participation of prosumers in the Nash–Cournot model for power market clearing. On this basis, we considered the uncertainty of renewable energy production, under which we used the distributionally robust optimization (DRO) model to produce a market equilibrium. Moreover, the Column-and-Constraint Generation algorithm was employed to solve the model. As a result, the impact of prosumers penetration and their production uncertainty on market equilibria was quantified and analyzed. Numerical simulations on an IEEE-30 bus system investigated the impact of the uncertainty of renewable energy output, the penetration level of wind power, and the demand level on the market equilibria. Test results demonstrate that the social welfare obtained from the proposed DRO model is 6.89% higher than that obtained from traditional robust optimization models. [ABSTRACT FROM AUTHOR]

• Identify Nash equilibrium by stochastic complementarity problem embedded with DEA. • Consider two scenarios of market powers between manufacturers and wholesalers. • Apply stochastic programming and robust optimization to address price uncertainty. • Show price uncertainty in the upstream significantly affecting the profits of the whole market. • Suggest the wholesalers should be leaders and the manufacturers negotiate the profit-sharing contracts. This study investigates how the exercise of market power affects the economic efficiency and revenue sharing in a bi-level market, which integrates upstream contract market and downstream wholesale market. We consider price volatility and identify Nash equilibrium restricted by the data envelopment analysis (DEA)-estimated capacity constraint. This study develops stochastic mixed complementarity problems (MiCP) models embedded with stochastic programming (SP) and robust optimization (RO) to address price uncertainty in a bi-level market. We investigate the exercise of market power: (1) wholesalers as leaders or (2) bilateral market power between manufacturers and wholesalers. A numerical study of the power generation market is conducted to validate the proposed stochastic MiCP models. The results show that price uncertainties in the upstream contract market have a significant effect in a bi-level market, and thus controlling price volatility in the upstream contract market will improve productivity and support policies. In addition, we suggest the wholesalers should be market leaders and the manufacturers should negotiate profit-sharing contracts with the wholesalers in a deregulated system. [ABSTRACT FROM AUTHOR]