Strategic Capacity Investments in an Imperfectly Competitive World Natural Gas Market

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dc.contributor.authorCigerli, Burcuen_US
dc.contributor.orgJames A. Baker III Institute for Public Policyen_US
dc.date.accessioned2016-08-23T21:23:21Zen_US
dc.date.available2016-08-23T21:23:21Zen_US
dc.date.issued2013en_US
dc.description.abstractIn this paper, we develop a model for the world natural gas market where buyers and sellers are connected by a trading network. However, this paper extends Cigerli (2013) by relaxing the assumption of fixed supply capacities and allowing for natural gas producers to invest in their supply capacities. We assume a two period model with no uncertainty and show that there is a unique Cournot-Nash equilibrium and the open-loop Cournot-Nash equilibrium and closed-loop Cournot-Nash equilibrium investments coincide. We apply this model to a network formed by using BP’s Statistical Review of World Energy 2010 major trade flows. Later, we change model parameters exogenously to analyze various policy scenarios. We find that producers respond to changes in market conditions by investing in their supply capacities instead of displacing their resources from other markets.en_US
dc.identifier.citationCigerli, Burcu. "Strategic Capacity Investments in an Imperfectly Competitive World Natural Gas Market." (2013) James A. Baker III Institute for Public Policy: <a href="http://bakerinstitute.org/research/strategic-capacity-investments-in-an-imperfectly-competitive-world-natural-gas-market/">http://bakerinstitute.org/research/strategic-capacity-investments-in-an-imperfectly-competitive-world-natural-gas-market/</a>.en_US
dc.identifier.urihttps://hdl.handle.net/1911/91318en_US
dc.publisherJames A. Baker III Institute for Public Policyen_US
dc.titleStrategic Capacity Investments in an Imperfectly Competitive World Natural Gas Marketen_US
dc.typeResearch paperen_US
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