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The business activity is inseparable from the support of documental information flow. In the past, the commercial documents needed a lot of time to get to the point-to-point, which could lead to problems, such as insecurity or the relatively long time. With the emergence of new technologies, it is possible to change this information transmission method to enable fast and accurate dissemination. For considering the possibility of technology adoption, this study investigates the role of blockchain service in term of market size and file circulation time. Specifically, we construct a game-theoretic model to find the equilibrium strategy from a manufacturer and two competing retailers. From the perspective of equilibrium, we investigate the results for market effects, economic effects, service effects, and service efficiency, respectively. Moreover, we also analyze the service strategy of retailers providing service by manufacturer, time sensitivity, and competitive intensity, respectively. Based on the above analysis, this study has obtained an equilibrium to support the commercial practice. In summary, this study has two contributions. On the one hand, we analyze the impact of the technological investment in blockchain service on asymmetric market scale competition. This result extends the application scope of blockchain service in the market. On the other hand, this study discusses the impact of time value on technology investment in blockchain service. Therefore, through the discussion of our study, the results show the value of blockchain service in information exchanges. [ABSTRACT FROM AUTHOR]

Patent pricing is the core issue in patent industrialisation. This paper uses game theory to study the effects of auction behaviours when the members of the patent portfolio are auctioned either together or separately. A comparison of patent product yields the results (1) the outputs of a patented product are lower in a packaged auction than in a separate auction, and the outputs of the two auction modes decrease as the correlation between patent members increases; (2) the profits of package portfolios are higher under packaged auctions than under separate auctions, and an enterprise's profit is negatively related to the correlation between the patent members; (3) when a patent portfolio is subjected to separate auction, the product outputs under Stackelberg equilibrium in a game are higher than that under static equilibrium, and the product outputs in the Stackelberg equilibrium decrease with the correlation between patent members; and (4) when the members of a patent portfolio are auctioned separately, the profits in the Stackelberg equilibrium and static equilibrium are related to the correlation between patent portfolio members; the profits in the Stackelberg equilibrium will first decrease and then increase as the correlation between patent portfolio members increases. [ABSTRACT FROM AUTHOR]

We study combinatorial auctions with bidders that exhibit an endowment effect. In most of the previous work on cognitive biases in algorithmic game theory the focus was on analyzing the implications and mitigating their negative consequences. In contrast, in this paper we show how in some cases cognitive biases can be harnessed to obtain better outcomes. Specifically, we study Walrasian equilibria in combinatorial markets. It is well known that Walrasian equilibria exist only in limited settings, e.g., when all valuations are gross substitutes, but fail to exist in more general settings, e.g., when the valuations are submodular. Our main result shows that when the valuations are submodular, even a mild degree of endowment effect is sufficient to guarantee the existence of Walrasian equilibria. [ABSTRACT FROM AUTHOR]

Linear complementarity problems (LCPs) are a powerful tool for modeling many practically relevant situations such as market equilibria. They also connect many subareas of mathematics like game theory, optimization, and matrix theory. Despite their close relation to optimization, the protection of LCPs against uncertainties-especially in the sense of robust optimization-is still in its infancy. During the last years, robust LCPs have only been studied using the notions of strict and Γ-robustness. Unfortunately, both concepts lead to the problem that the existence of robust solutions cannot be guaranteed. In this paper, we consider affinely adjustable robust LCPs. In the latter, a part of the LCP solution is allowed to adjust via a function that is affine in the uncertainty. We show that this notion of robustness allows us to establish strong characterizations of solutions for the cases of uncertain matrix and vector, separately, from which existence results can be derived. Our main results are valid for the case of an uncertain LCP vector. Here, we additionally provide sufficient conditions on the LCP matrix for the uniqueness of a solution. Moreover, based on characterizations of the affinely adjustable robust solutions, we derive a mixed-integer programming formulation that allows us to solve the corresponding robust counterpart. If, in addition, the certain LCP matrix is positive semidefinite, we prove polynomial-time solvability and uniqueness of robust solutions. If the LCP matrix is uncertain, characterizations of solutions are developed for every nominal matrix; i.e., these characterizations are, in particular, independent of the definiteness of the nominal matrix. Robust solutions are also shown to be unique for a positive definite LCP matrix, but both uniqueness and mixed-integer programming formulations still remain open problems if the nominal LCP matrix is not positive definite. [ABSTRACT FROM AUTHOR]

Summary: Water and energy are two scarce and concerning resources interconnected in the closed‐loop water‐energy nexus, exemplifying the co‐dependence of water and energy production. In this article, we investigate the interaction between the industries of these two resources and model it as a simultaneous game. We consider a supply chain that consists of water suppliers (WSs), power suppliers (PSs), and consumers of these commodities. In the supply chain, WSs purchase power from the power market, and PSs purchase water from the water market. Other consumers can also buy these resources at the water and power markets. The prices of these commodities depend on their quantities supplied to the markets. Each firm tries to maximize its own profit, in doing so the suppliers of water and power decide their production quantities. In this research, the Nash equilibria of the firms are determined and a comparative statics is performed on various economic measures. When there are multiple equilibria, the analysis finds the Pareto optimal equilibrium. We find that when there is sufficient supply to meet the demand of both industries and consumers, improvement of production technology improves social welfare and other economic measures of the supply chain. We also find that higher competition in either industry improves all economic measures. However, when either water or power supply is solely consumed by the firms in the cross industry, improvement of technology and higher competition can have a negative effect on some measures. [ABSTRACT FROM AUTHOR]

This paper evaluates the optimal pricing for two Internet service providers and two network providers; all are competing on price, which is based on quality. To find the optimal prices of service and network providers and to determine optimal scenarios, a two-stage competition is modeled. In the first stage, network providers compete on market prices by setting the quality in four scenarios. At this stage, we found the equilibrium prices in the market. In the second stage, by obtaining market prices, service providers compete on network prices. Finally, the equilibrium solutions are compared with each other by considering the intensity of market competition in price and quality. It is shown that equilibrium never occurs in the case when the smaller service provider has a higher Internet quality than the other (scenario 2) and the more significant service provider offers a higher Internet quality (scenario 4). Besides, when both Internet service providers offer low-quality Internet (scenario 1) and high-quality Internet (scenario 3), the companies make the most profit. By increasing and decreasing the competition in quality, equilibrium would still exist for the first scenario, and the third scenario, respectively. The intensity of market competition in price behaves oppositely as quality. [ABSTRACT FROM AUTHOR]

• We propose a general framework to describe ridesourcing systems. The framework can aid understanding of the interactions between endogenous and exogenous variables in the systems, their changes in response to platforms' operational strategies and decisions, multiple system objectives, and market equilibria in a dynamic manner. • We conduct a comprehensive review of the literature on important research problems in different areas from diverse perspectives, including (1) demand and pricing, (2) supply and incentives, (3) platform operations, and (4) competition, impacts, and regulations. • The research problems have been and are being addressed by various methodologies from diversified disciplines, such as statistics and econometrics, labor economics, microeconomics, queueing theory and stochastic process, integer and combinatorial optimization, stochastic and dynamic programming, game theory and mechanism design, and machine learning. • Many avenues for future research are identified, such as the improvement of various components and their integration to form a more efficient ridesourcing system. With the rapid development and popularization of mobile and wireless communication technologies, ridesourcing companies have been able to leverage internet-based platforms to operate e-hailing services in many cities around the world. These companies connect passengers and drivers in real time and are disruptively changing the transportation industry. As pioneers in a general sharing economy context, ridesourcing shared transportation platforms consist of a typical two-sided market. On the demand side, passengers are sensitive to the price and quality of the service. On the supply side, drivers, as freelancers, make working decisions flexibly based on their income from the platform and many other factors. Diverse variables and factors in the system are strongly endogenous and interactively dependent. How to design and operate ridesourcing systems is vital—and challenging—for all stakeholders: passengers/users, drivers/service providers, platforms, policy makers, and the general public. In this paper, we propose a general framework to describe ridesourcing systems. This framework can aid understanding of the interactions between endogenous and exogenous variables, their changes in response to platforms' operational strategies and decisions, multiple system objectives, and market equilibria in a dynamic manner. Under the proposed general framework, we summarize important research problems and the corresponding methodologies that have been and are being developed and implemented to address these problems. We conduct a comprehensive review of the literature on these problems in different areas from diverse perspectives, including (1) demand and pricing, (2) supply and incentives, (3) platform operations, and (4) competition, impacts, and regulations. The proposed framework and the review also suggest many avenues requiring future research. [ABSTRACT FROM AUTHOR]

We prove that finding an ε-approximate Nash equilibrium is PPAD-complete for constant ε and a particularly simple class of games: polymatrix, degree 3 graphical games, in which each player has only two actions. As corollaries, we also prove similar inapproximability results for Bayesian Nash equilibrium in a two-player incomplete information game with a constant number of actions, for relative ε-well supported Nash equilibrium in a two-player game, for market equilibrium in a nonmonotone market, for the generalized circuit problem defined by Chen, Deng, and Teng [J. ACM, 56 (2009)], and for approximate competitive equilibrium from equal incomes with indivisible goods. [ABSTRACT FROM AUTHOR]

The diffusion of electric vehicles (EVs) is studied in a two-sided market framework consisting of EVs on the one side and EV charging stations (EVCSs) on the other. A sequential game is introduced as a model for the interactions between an EVCS investor and EV consumers. A consumer chooses to purchase an EV or a conventional gasoline alternative based on the upfront costs of purchase, the future operating costs, and the availability of charging stations. The investor, on the other hand, maximizes his profit by deciding whether to build charging facilities at a set of potential EVCS sites or to defer his investments. The solution of the sequential game characterizes the EV-EVCS market equilibrium. The market solution is compared with that of a social planner who invests in EVCSs with the goal of maximizing the social welfare. It is shown that the market solution underinvests EVCSs, leading to slower EV diffusion. The effects of subsidies for EV purchase and EVCSs are also considered. [ABSTRACT FROM AUTHOR]

Energy storage can provide a range of revenue streams for investors in electricity markets. However, as their deployments continue to rise, storage will no longer be a player on the sidelines and remain a price-taker, rather, these assets will start to impact prices. In this study, accounting for energy storage as a price-maker and using data from CAISO, we investigate strategic market behavior among competing investors using a non-cooperative game. We establish a centralized optimization problem to compute the market equilibrium. In the game, each investor initially decides on how much to invest and then how to operate their asset over a time horizon. Investors are allowed to deploy different energy storage technologies. Analytically, we show that an increasing number of investors will increase the market competition thereby reducing profits while increasing the total capacity of storage deployed. Numerically, our key findings include: (a) the difference in optimal investments under price-taker and price-maker assumptions, (b) as wind and solar assets expand under different resource-mix scenarios, there is a corresponding non-monotonic variation in arbitrage potential for energy storage, (c) when competition is intense and investors are allowed to invest in different technologies, a slight increase in storage technology performance can significantly improve an investor's profit share, (d) when the arbitrage opportunity increases with renewables, longer duration storage technologies may gain an advantage, (e) Li-ion batteries dominate the market under low-moderate renewable energy penetration or with steep energy-capacity cost reductions in the future. • We develop a game-theoretical framework for strategic investments in energy storage. • The framework derives a centralized optimization problem to compute the Nash equilibrium. • The impact of energy storage on market price is characterized using CAISO data. • We present insights on arbitrage potential and market competition for energy storage investors. • We quantify the effects of the number of investors, renewable energy levels, and technology heterogeneity. [ABSTRACT FROM AUTHOR]

Although the biofuel market remains at its early stage, it is expected to play an important role in climate policy in the future in the transportation sector. In this paper, we develop a bottom-up equilibrium model to study the supply chain of the biofuel market, explicitly formulating the interactions among farmers, biofuel producers, blenders, and consumers. The model is built on optimization problems faced by each entity and considers decisions associated with farmers' land allocation, biomass transportation, biofuel production, and biofuel blending. As such, the model is capable of and appropriate for policy analysis related to interactions among multiple stakeholders. For example, the model can be used to analyze the impacts of biofuel policies on market outcomes, pass-through of taxes or subsidies, and distribution of consumers' or producers' surplus. The equilibrium model can also serve as an analytical tool to study the price impact of biomass, biofuel, and Renewable Identification Numbers (RINs) for biofuels. We demonstrate the model by applying it to a case study of Iowa. We specifically focus on the effects of market structure, i.e., points-of-implementation on subsidies on market outcomes. The results indicate that some entities can benefit greatly at the expense of others when they possess market power. Government oversight is therefore needed to safeguard the development of the sector. [ABSTRACT FROM AUTHOR]

We consider a bargaining problem which engages a seller (player I) and a buyer (player II). Each player possesses private information about own reservation price which is unavailable to the opponent. Players appear on the market and announce their prices for a product. If the transaction takes place then the gain of a player is the difference between the negotiated and the reservation prices. We find the equilibrium in this game among threshold strategies. [ABSTRACT FROM AUTHOR]

We propose a bilevel mixed-integer nonlinear programming (MINLP) model for the optimal design and planning of non-cooperative supply chains from the manufacturer's perspective. Interactions among the supply chain participants are captured through a single-leader–multiple-follower Stackelberg game under the generalized Nash equilibrium assumption. Given a three-echelon superstructure, the lead manufacturer in the middle echelon first optimizes its design and operational decisions, including facility location, sizing, and technology selection, material input/output and price setting. The following suppliers and customers in the upstream and downstream then optimize their transactions with the manufacturer to maximize their individual profits. By replacing the lower level linear programs with their KKT conditions, we transform the bilevel MINLP into a single-level nonconvex MINLP, which is further globally optimized using an improved branch-and-refine algorithm. We also present two case studies, including a county-level biofuel supply chain in Illinois, to illustrate the application of the proposed modeling and solution methods. [ABSTRACT FROM AUTHOR]

This paper studies Bertrand price-setting behavior when firms face capacity constraints (Bertrand-Edgeworth game). This game is known to lack equilibria in pure strategies, while the mixed-strategy equilibria are hard to characterize. We explore families of heuristic rules for individual price-setting behavior and the resulting market patterns, through simulations of agent-based models and laboratory experiments. Overall, the individual pricing strategies observed experimentally can be represented approximately by a sales-based simple rule. In the experiments, average market prices tend to converge from above and approach a state resembling a steady state, with slow aggregate price variations and low price dispersion around an average near the competitive level. However, that configuration can be disturbed occasionally by excursions triggered by discrete price raises of some agents. Salient features of experimental results can be described by simulations where agents use sales-based heuristics with parameters calibrated from the experiments. The results obtained here suggest the existence of useful complementarities between analytical, experimental and agent-based simulation approaches. [ABSTRACT FROM AUTHOR]

• A peer-to-peer energy trading market mechanism with shared energy storage units is proposed. • A non-cooperative game among peer-to-peer market participants is presented. • The generalized Nash equilibrium problem among shared energy storage users is depicted. • A game equilibrium solution based on KKT condition is proposed. • Proposed mechanism improves the efficiency and ensures fairness. The high penetration of distributed energy resources with local renewable energy consumption facilitates the emergence of peer-to-peer (P2P) energy trading, where a peer can share excessive energy with local peers. P2P energy trading is expected to be a promising business model in the future transactive energy market. Influenced by the sharing economy principle, shared energy storage(SES) is investigated to reduce the costly initial investment and improve the utilization rate of storage devices. Given the context, this paper proposes an equilibrium model of a P2P energy trading market, considering the deployment of shared energy storage in the residential consumer-side. The market equilibrium problem consists of two interwoven games. Considering the benefit conflicts between energy sellers and buyers in P2P energy trading, the P2P transaction between peers can be described as a non-cooperative game. Considering the limited SES capacity resources, the competition among SES users can be viewed as a generalized Nash equilibrium problem. These two games in the P2P market interact with each other and can be summarized as a holistic equilibrium problem, in which the P2P transaction price is endogenously determined and storage capacity is allocated. The market equilibrium problem can be solved based on Karush-Kuhn-Tucker (KKT) optimality conditions and linearization techniques, finally cast as a mixed-integer linear program. Numerical simulation demonstrates that P2P energy trading benefits all participants and the introduction of shared energy storage can further reduce energy costs. [ABSTRACT FROM AUTHOR]

We propose a new convex optimization formulation for the Fisher market problem with linear utilities. Like the Eisenberg-Gale formulation, the set of feasible points is a polyhedral convex set while the cost function is nonlinear; however, the optimum is always attained at a vertex of this polytope. The convex cost function depends only on the initial endowments of the buyers. This formulation yields an easy, simplex-like algorithm which is provably strongly polynomial for many special cases. The algorithm can also be interpreted as a complementary pivot algorithm resembling the classical Lemke-Howson algorithm for computing Nash equilibrium of two-person bimatrix games. [ABSTRACT FROM AUTHOR]

This paper provides a quantitative analysis of different equilibrium concepts employed in the literature on the cartel-fringe models. It is shown that small changes in parameter values can greatly affect outcomes due to changes in extraction schedules. Furthermore, it is shown that results of the closed-loop Stackelberg equilibrium are often closer to the results of the open-loop Nash equilibrium than to those of the open-loop Stackelberg equilibrium. [ABSTRACT FROM AUTHOR]

In contrast to the centralized pool model, bilateral markets present a decision-making situation in which information plays a major role along with the physical and operative constraints of the network. We propose a model that includes network constraints for competitive bilateral electricity markets based on an evolutionary bipartite complex network in which the nodes and weighted links represent the players and transactions, respectively. The strong stable equilibrium of the network is applied to detect possible market equilibria obtained through a dynamic game, with incomplete and imperfect information, in which the players form an evolutionary network while trying to maximize their own utilities. The model is conceptually illustrated with a four-bus test system and then applied to the IEEE30 test system to analyze the impact of the transmission network and information on the equilibria and market performance. [ABSTRACT FROM PUBLISHER]

Inspired by the convex program of Eisenberg and Gale which captures Fisher markets with linear utilities, Jain and Vazirani [K. Jain and V. V. Vazirani, Games and Economic Behavior, 70 (2010), pp. 84-106] introduced the class of Eisenberg-Gale (EG) markets. We study the structure of EG(2) markets, the class of EG markets with two agents. We prove that all markets in this class are ratiollal, that is, they have rational equilibrium, and they admit strongly polynomial time algorithms whenever the polytope containing the set of feasible utilities of the two agents can be described via a combinatorial linear program (LP). This helps positively resolve the status of two markets left as open problems by Jain and Vazirani: the capacity allocation market in a directed graph with two source-sink pairs and the network coding market in a directed network with two sources. Our algorithms for solving the correspoRding nonlinear convex programs are fundamentally different from those obtained by Jain and Vazirani; whereas they use the primal-dual schema, our main tool is binary search powered by the strong LP-duality theorem. [ABSTRACT FROM AUTHOR]

Abstract: We briefly discuss ideas about computable economics, and comment on the contributions of A.A. Lewis and K.V. Velupillai. We then sketch the mathematical background for the Tsuji et al. (Tsuji, M., da Costa, N.C.A., Doria, F.A., 1998. The incompleteness of theories of games. Journal of Philosophical Logic 27, 553–564) result on the undecidability and incompleteness of game theory and of the theory of competitive markets, using that result in the concluding sections of the paper to examine the (possible) empirical interpretation of economic and social systems as computing devices. [Copyright &y& Elsevier]

The global share of renewable energy sources (RES) in total generation capacity reached 34.7% in 2019 and has been continuously increasing. Power system flexibility addressing the uncertainty and variability of RES has become a major concern in energy transition. This paper proposes to apply mobile energy storage (MES) from independent MES owners as a flexibility-enhancement ancillary service in the day-ahead electricity market. First, we have proposed a market-based methodology to incent MES owners to provide flexibility service in power systems by simultaneously releasing Locational Marginal price (LMP) and Uncertainty Marginal Price (UMP). The LMP and UMP were obtained by solving robust unit commitment and security-constrained economic dispatch, representing the need for flexibility resources. Second, the optimal operational strategy of MESs was established to respond to LMP and UMP and maximize their profits by providing energy and reserve flexibility subjects to the reserve and traffic constraints. Third, a game-theoretic model was developed to determine market equilibrium by minimizing the operational costs of the power system and maximizing the profits of MES owners. To avoid homogenous behaviors of MESs in solving this model, a sequential dispatching algorithm was developed such that each MES of one MES owner has a unique price signal. An objective function update strategy was accordingly developed to take the interaction among MESs into consideration and ensure a maximum total profit for MES owners. Finally, case studies with IEEE 6-bus system, IEEE 118-bus system, and MATPOWER 300-bus system were provided to validate the proposed methods, demonstrating that MESs increase power system flexibility and their own profits while decreasing the energy and reserve payment of consumers. • Mobile energy storage has temporal, spatial, and power/energy flexibility. • We provide a market-based methodology to incent mobile energy storage to provide flexibility. • Efficient algorithm is developed to obtain the market equilibrium. • Flexibility provided by mobile energy storages reduces the operational cost of power systems. • Mobile energy storage owners obtain revenue by providing flexibility service. [ABSTRACT FROM AUTHOR]

• Propose an OD competitive network equilibrium model for ride-sourcing market. • Adopt finite-dimensional variational inequality based on non-cooperative game theory. • Incorporate heavy-asset and light-asset transportation network companies (TNCs). • Derive analytical monotonicity of equilibrium optima and sensitivity analysis. • Gain managerial insights for both the government and TNCs. The ride-sourcing market (RSM) consists of three parts: ride-sourcing platforms or transportation network companies (TNCs) that set the price for passengers and wage of drivers, passengers requesting on-demand ride services, and drivers offering the services. This paper proposes an origin–destination (OD) competitive network equilibrium model for RSM with heterogeneous TNCs. A finite-dimensional variational inequality is adopted to formulate the RSM competitive network equilibrium model based on the non-cooperative game theory. It assumes that each TNC and individual drivers aim to maximize profits or earnings, while passengers of demand regions seek utility maximization. The monotonicity of equilibrium optima is analytically derived, and the sensitivity analysis of parameters is theoretically conducted and numerically illustrated. The managerial insights are gained both for the government and TNCs. The analytical findings include: (a) market equilibrium price increases and market equilibrium travel quantity decreases in either the transaction cost, driver cost, or TNC cost; (b) market equilibrium price decreases in the number of light-asset TNCs, while the market equilibrium travel quantity increases in it; and (c) raising RSM entry requirements improves the market equilibrium price and reduces travel demand on RSM. The numerical results illustrate the plausibility and flexibility of the analytical model. The proposed model is general and capable of analyzing the network equilibrium with multi-type drivers, demand regions, and heterogeneous ride-sourcing platforms. [ABSTRACT FROM AUTHOR]

In any two-sided matching market, a stable matching can be found by a central agency using the deferred acceptance procedure of Gale and Shapley. But if the market is decentralized and information is incomplete then stability of the ensuing matching is not to be expected. Despite the prevalence of such matching situations, and the importance of stability, little theory exists concerning instability. We discuss various measures of instability and analyze how they interact with the structure of the underlying preferences. Our main result is that even the outcome of decentralized matching with incomplete information can be expected to be “almost stable” under reasonable assumptions. [ABSTRACT FROM AUTHOR]

This article considers a game theoretic situation for an analysis of electricity spot markets modeled by uniform price auctions. The properties of equilibrium in the electricity spot markets are analyzed and the effects of generation limits on the equilibrium are analytically explored. Generation firms, which are supposed to maximize their profits through optimal bidding strategies, submit their generation offers in the form of sealed bid and the markets operate as uniform price auctions. Generation quantities allocated to individual firms and market clearing prices, which determine profits of generation firms, are affected by their bidding strategies and strategic interactions among generation firms as well. In this article, two market situations are considered. In the first situation, unconstrained market condition is considered. No generation quantity of firms is binding on its maximum limit. In the other situation, constrained market condition is dealt with. The generation quantity of generation firms is constrained to its limit and the variation of market equilibriums are analytically examined. For both cases, best responses of the individual firms and consequent optimal bidding strategies at equilibriums are analytically derived. Finally, effects of generation limits upon market equilibriums are investigated, focused on the variation of market equilibriums which is resulted from the strategic behaviors of generation firms. A simple numerical example with two generation firms is provided to show the basic idea of the proposed method. [ABSTRACT FROM AUTHOR]

The use of Nash equilibria as strategic bidding solutions for players competing in a centralized electricity market has been explored in the literature. In addition, the existence of multiple market equilibria, both in pure and in mixed strategies, when system constraints are taken into account in the market solution, has been shown for particular test cases. This paper addresses the difficult problem, due to its exponential order, of finding multiple equilibria in centralized electricity markets. A systematic procedure which allows the analysis of multimachine systems is employed. Moreover, some conclusions concerning the existence of multiple market equilibria in real networks are made possible by the method presented here. The paper carefully explains the models and market assumptions under discussion and details the algorithmic procedure for the search method. The IEEE 30-bus and 57-bns systems are used as test cases. [ABSTRACT FROM AUTHOR]

• Decentralized investments in conventional and renewable capacities are coordinated. • Regulatory targets for adequacy and environmental conditions are promised concurrently. • Cost of designed incentives is reduced considerably compared to models in the literature. • The proposed incentive design model is recast as a mixed-integer linear programming. Environmental concerns and energy security issues have led to the rapid growth of renewable capacities in the power sector. With the increase in the penetration of renewables, conventional generations such as thermal technologies have faced the decreased market prices, reduced volume of sold energies and thus diminished revenues. The decrease in the interests for investment in conventional capacities resulting from revenue deficiency from one side and high penetration of non-dispatchable renewables such as wind and solar generations from the other side may hinder the generation adequacy. So, the investment in conventional and renewable capacities should be done in a coordinated manner to meet both adequacy and environmental goals. Thus, the present study is conducted to present a regulatory tool for coordinated incentive design of investment in conventional and renewable generation capacities considering market equilibria. To this aim, a bi-level model is proposed where in the first level, regulator determines capacity-based and energy-based incentives paid for conventional and renewable generations, respectively, considering targets for adequacy and environmental issues. In the second level, the investment behavior of generation companies in response to investment incentives is anticipated using a game-theoretic model. Our results show that regulatory targets for adequacy and environmental issues are simultaneously realized by the proposed coordinated incentive design. Besides, cost of the designed incentives considerably reduces compared to the recent works. [ABSTRACT FROM AUTHOR]

In a duopoly market where exists technological differences, the inferior manufacturer always lies in the disadvantaged status because of the terrible energy efficiency in production. Lack of cooperation fee, and disadvantages in technology and skills are main barriers limiting the inferior manufacturer's technological advancement. This study aims to investigate the inferior manufacturer's cooperation with a third party under the Energy Performance Contracting (EPC) mechanism through a game theory model. The results show that: (i) Cooperation with a third party under the EPC mechanism could help the inferior manufacturer achieve technological advancement and gain more profits without bearing extra cooperation fees. (ii) When the inferior manufacturer carries out cooperation with a third party under the EPC mechanism, four major factors are critical, including the revenue sharing ratio of the third party, the service level of the third party, the market size and the energy price. (iii) In EPC cooperation, the optimal service level provided by the third party depends on the revenue sharing ratio. (iv) When the inferior manufacturer carries out EPC cooperation with a third party, the cooperation would reduce the market equilibrium price, enhance the total equilibrium quantities and in the meanwhile increase the total consumer surplus. Overall, the study contributes to exploring the feasibility of introducing the EPC cooperation to fulfill the inferior manufacturer's technology advancement, in which the inferior manufacturer does not bear any extra fee for the cooperation. Particularly, the study contributes to investigating the manufacturer's optimal cooperation decisions by assessing the EPC cooperation between the inferior manufacturer and the third party based on game-theoretic models. [ABSTRACT FROM AUTHOR]

Building material enterprises (BMEs) and waste recycling enterprises (WREs) are two critical stakeholders in construction waste recycling, and their decisions toward waste recycling are influential to development of waste recycling market. However, the present literature fails to consider consumers' quality perceptions of recycled materials when investigating stakeholder decisions in the market, which significantly affects understanding of stakeholder decisions on waste recycling. To address the research gap, this study investigates from a theoretical perspective the optimal strategies of the BME and the WRE by considering consumers' quality perceptions toward recycled materials. The game theory is employed to develop models and analyze stakeholder decisions in the context of different construction waste (CW) recycling scenarios. It is found that the consideration of consumers' quality perceptions toward recycled materials shapes three CW recycling scenarios (i.e., business stripping mode, business monopoly mode, and business cooperation mode) in the waste recycling markets. When there is a demand for recycled materials, the BME should take good use of its labor and capital advantages to actively develop the waste recycling market for higher profits. However, when there are already independent WREs, the BME should perform waste recycling business jointly with the WRE. In addition, there exists stable competitive market equilibrium, depending on low consumer quality perception of recycled materials produced by the BME and small consumer quality perception disparity between recycled materials provided by the two enterprise groups. Under the circumstance, the BME and the WRE can achieve a win-win situation for gaining profits. This theoretical study contributes to a new perspective (i.e., consumers' quality perceptions) for better understanding decisions of major stakeholders (i.e., the BME and the WRE) on CW recycling. In addition, the study for the first time introduces the game theory into explaining CW recycling, which may enhance the effectiveness of policies aiming at promoting CW recycling practices. • We investigated optimal strategies of two stakeholders by considering consumers' quality perceptions of recycled materials. • There are three market modes in the waste recycling markets, depending on stakeholder relationships. • The building material enterprise should join the market if there is a demand for recycled materials. • A win-win situation among the BME and the WRE can be achieved for mutual benefits. [ABSTRACT FROM AUTHOR]