Security Of Supply In The European Gas Market A Model-Based Analysis
This paper introduces a general static Cournot-game model to study the Natural Gas market, taking into account disruption risks from suppliers. In order to most realistically describe the economical situation, the representation divides the market into two stages: the upstream market that links -by means of long-term contracts-local producers in exporting countries (Russia, Algeria, etc.) to foreign retailers who bring gas to the consuming countries to satisfy local demands in the downstream market. Thanks to short-run demand functions, the authors are able to introduce disruption costs to be paid to the consumers should disruption occur.