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dc.contributor.authorRutherford, Thomas F.en_US
dc.contributor.authorBöhringer, Christophen_US
dc.date.accessioned2009-02-16T14:49:53Z-
dc.date.available2009-02-16T14:49:53Z-
dc.date.issued2006en_US
dc.identifier.urihttp://hdl.handle.net/10419/24199-
dc.description.abstractThe formulation of market equilibrium problems as mixed complementarity problems (MCP) permits integration of bottom-up programming models of the energy system into top-down general equilibrium models of the overall economy. Despite the coherence and logical appeal of the integrated MCP approach, implementation cost and dimensionality both impose limitations on its practical application. A complementarity representation involves both primal and dual relationships, often doubling the number of equations and the scope for error. When an underlying optimization model of the energy system includes upper and lower bounds on many decision variables the MCP formulation may suffer in robustness and efficiency. While bounds can be included in the MCP framework, the treatment of associated income effects is awkward. We present a decomposition of the integrated MCP formulation that permits a convenient combination of top-down general equilibrium models and bottom-up energy system models for energy policy analysis. We advocate the use of complementarity methods to solve the top-down economic equilibrium model and quadratic programming to solve the underlying bottom-up energy supply model. A simple iterative procedure reconciles the equilibrium prices and quantities between both models. We illustrate this approach using a simple stylized model.en_US
dc.language.isoengen_US
dc.publisherZentrum für Europäische Wirtschaftsforschung (ZEW) Mannheimen_US
dc.relation.ispartofseriesZEW Discussion Papers 06-07en_US
dc.subject.jelC61en_US
dc.subject.jelC68en_US
dc.subject.jelD58en_US
dc.subject.jelQ43en_US
dc.subject.ddc330en_US
dc.subject.keywordMathematical Programmingen_US
dc.subject.keywordMixed Complementarityen_US
dc.subject.keywordTop-Down/Bottom-Upen_US
dc.subject.stwEnergiepolitiken_US
dc.subject.stwWirtschaftspolitische Wirkungsanalyseen_US
dc.subject.stwEnergieökonomiken_US
dc.subject.stwAllgemeines Gleichgewichten_US
dc.subject.stwCGE-Modellingen_US
dc.subject.stwDekompositionsverfahrenen_US
dc.subject.stwTheorieen_US
dc.titleCombining Top-Down and Bottom-up in Energy Policy Analysis: A Decomposition Approachen_US
dc.typeWorking Paperen_US
dc.identifier.ppn507357183en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
dc.identifier.repecRePEc:zbw:zewdip:4586-
Appears in Collections:Publikationen von Forscherinnen und Forschern des ZEW
ZEW Discussion Papers

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