The Behavior of Iranian Restructured Electricity Market in Supply Function Equilibrium Framework

The Iranian electricity industry has been restructured following the global experiences. The main objective of restructuring is transition from natural monopoly towards competition in order to improve efficiency. Currently, the Iranian electricity market is performing as imperfect competition and Pay-as-Bid (PAB) auctions are the major trade mechanism in this market. This paper proves that Supply Function Equilibrium (SFE) is an appropriate approach to analyze behavior of the Iranian electricity market. Isfahan electricity market has been considered as a case study in which SFE is applied regarding marginal cost estimation as well as demand uncertainty. The derived SFE indicates that there is major difference between SFE and Nash equilibrium.

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Year of publication:	2014
Authors:	Motamedi, Majid ; Moeeni, Shahram ; Gharakhani, Salman ; Keyfarokhi, Iman
Published in:	International Journal of Academic Research in Business and Social Sciences. - Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences. - Vol. 4.2014, 1, p. 178-191
Publisher:	Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences
Subject:	Restructuring \| Game theory \| Supply Function Equilibrium \| Pay-as-Bid \| Electricity market \| Iran

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Extent:	application/pdf text/html
Type of publication:	Article
Classification:	C70 - Game Theory and Bargaining Theory. General ; D21 - Firm Behavior ; D40 - Market Structure and Pricing. General ; L13 - Oligopoly and Other Imperfect Markets ; Q41 - Demand and Supply
Source:	RePEc - Research Papers in Economics

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