The research on the A-J effect and the strategy of the power company under dynamic game of incomplete information

Author

Ye, Ze ; Peng, Junda

Author_Institution

Sch. of Econ. & Manage., Changsha Univ. of Sci. & Technol., Changsha, China

fYear

2011

fDate

16-18 Sept. 2011

Firstpage

5605

Lastpage

5608

Abstract

This paper will study the A-J Effect and the strategy of the Power Company under dynamic game of incomplete information. We will research the dynamic game of information between the regulatory agencies and power companies, and then we conclude that the optimal strategy of Power Company is not to make excessive capital investment. The regulated assets, debt ratio and the extra cost will limit the Power Company´s investment. At the same time, Power Company will consider three factors: the regulated assets, the loan interest rate and the rate of return to adjust its investment strategy. In each kind of optimal strategy, there will exists the optimal debt ratio for the Power Company.

Keywords

electricity supply industry; game theory; investment; A-J effect; capital investment; debt ratio; dynamic incomplete information game; loan interest rate; power company optimal strategy; regulated assets; regulatory agencies; Companies; Economics; Educational institutions; Electricity; Games; Investments; Regulators; Coal A-J effect; Debt ratio; Rate of return regulation; Regulated asset;

fLanguage

English

Publisher

ieee

Conference_Titel

Electrical and Control Engineering (ICECE), 2011 International Conference on

Conference_Location

Yichang

Print_ISBN

978-1-4244-8162-0

Type

conf

DOI

10.1109/ICECENG.2011.6057069

Filename

6057069