Capacity investment model for airport facilities under demand uncertainty

2016 ◽  
Vol 50 (8) ◽  
pp. 1896-1911 ◽  
Author(s):  
Yanshuo Sun ◽  
Paul M. Schonfeld
Keyword(s):  
Demand Uncertainty ◽  
Investment Model ◽  
Capacity Investment

scholarly journals EFFECT OF SALVAGE MARKET ON STRATEGIC TECHNOLOGY CHOICE AND CAPACITY INVESTMENT DECISION OF FIRM UNDER DEMAND UNCERTAINTY

2016 ◽  
Vol 17 (1) ◽  
pp. 140-155 ◽  
Author(s):  
Mohammad Ali KASHEFI
Keyword(s):  
Demand Uncertainty ◽  
Numerical Study ◽  
Investment Decision ◽  
Secondary Market ◽  
Theoretic Model ◽  
Technology Choice ◽  
Capacity Investment ◽  
Flexible Technology ◽  
Game Theoretic ◽  
Unique Nash Equilibrium

This paper examines the effect of salvage market on technology choice and capacity investment decision of two firms that compete on quantity under demand uncertainty. A game theoretic model applies such that firms choose their production technology between two alternatives: flexible versus inflexible production process. Then they decide on the amount of capacity investment: flexible firm makes decision about general and specific components and inflexible firm just about unified component. One stage forward both enter the primary market in which demand is uncertain and play a la Cournot and finally, flexible firm will be able to sell its unsold general components in the secondary market with a deterministic price. Numerical study was employed to observe equilibrium behavior of firms. Findings demonstrate that with symmetric parameterization there is a unique Nash equilibrium in which both firms choose inflexible technology while applying asymmetric parameters has the potential to form two types of equilibrium when both firms choose inflexible technology or only one firm chooses flexible technology. Moreover, it is shown that there is a cost threshold that could shift the equilibria.

scholarly journals Oligopoly Power Producer’s Capacity Investment Model with Contracts for Differences

2013 ◽  
Vol 2013 ◽  
pp. 1-13
Author(s):  
Xinhua Zhang ◽  
Hairong Huang ◽  
Xiaohua Xia
Keyword(s):  
Power Supply ◽  
Supply And Demand ◽  
Optimal Investment ◽  
Investment Strategy ◽  
Investment Model ◽  
Capacity Investment ◽  
Unit Load ◽  
Price Cap ◽  
Renewable Power ◽  
Regulation Policy

This paper presents a three-level oligopoly power producer’s capacity investment game model, whose first level considers optimal regulation policy, and second-level models producer’s capacity investment strategy based on the analysis of power producer’s equilibrium biding strategy with capacity and price cap constraints at third level. We solve the model with backward induction and simulate the symmetric case. Precisely, we examine the effect of the number of oligopoly power producers, price cap, and contracts for differences (CFDs) on the unit load and power sale price and explore the optimal investment policy based on the maximization of discounted social welfare. For the proportion of power in CFDs being very big and power supply being relatively nervous in Chinese power market, we discuss the effect of power capacity investment subsidies and CFDs power price on power supply and demand, whose results indicate that reducing the proportion of CFDs’ power in the power producer’s access grid power is an effective way to alleviate the tension in power supply and demand, and the current renewable energy policy can neither necessarily ease the tension condition of power supply nor can it necessarily promote the construction of renewable power generation units.

Volume flexibility and capacity investment under demand uncertainty

2016 ◽  
Vol 178 ◽  
pp. 95-108 ◽  
Author(s):  
Verena Hagspiel ◽  
Kuno J.M. Huisman ◽  
Peter M. Kort
Keyword(s):  
Demand Uncertainty ◽  
Capacity Investment ◽  
Volume Flexibility
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