Associate Professor, Monash University -- Australia

Best contact: guillaume.roger72[at]gmail.com

Call for students: Monash University and AEMO invite prospective graduate students to apply for the Zema Energy Studies Scholarship .


We study a long-horizon, oligopolistic market with random shocks to demand that can be arbitraged by two large storage operators with finite capacity. The application we speak to is electricity but our results extend to any storable commodity – that is,  most commodities. Because the arbitrage spread is so sensitive to market power, storage units face very strong incentives to restrain quantities by tacitly colluding. This cooperation takes new forms thanks to the multiplicity of actions they must take: selling, buying or both. We construct payoff-maximizing equilibria, and uncover a new form of partial collusion that trades off quantities and delay. Head-on competition is not always an equilibrium of the long-horizon game, unlike many standard games, when market power becomes large enough. We present some robustness checks. We also draw implications for policy and suggest poorly competitive storage is a negative externality to the development of the underlying commodity – for example, renewable energy.We model the dynamic trading of electricity by a storage operator in an oligopolistic market with demand shocks that make room for intertemporal arbitrage. We must restrict attention to heuristics for tractability reasons.  The dynamics of the stochastic game  are driven with the interaction of the heuristic, the exogenous stochastic process and the constraints on capacity and on short-selling.  We uncover a strong precautionary motive that we call the continuation risk.  A storage operator balances current arbitrage revenue and the continuation risk.We study existence and characterisation of supply function equilibrium when players have fixed costs. As often the case in Walrasian markets, equilibrium fails to exist in general because of the non-convexities introduced by fixed costs. Here they manifest themselves in a novel way through point deviations off supply schedules. Existence is restored when demand is large enough, and players are constrained to use monotone schedules only to rule out these point deviations. Under these conditions we characterise the symmetric equilibrium, which is unique. This work informs market design.This is a first: empirical work on an applied problem!  We decompose electricity consumption and tease out implicit subsidies that arise naturally in fixed-rate tariffs.  The value of electricity differs across households and over time, but fixed-rate tariffs fail to reflect these facts.  Perhaps surprisingly we find that more vulnerable households cross-subsidise wealthier one.  Moving to real-time pricing would unwind these subsidies and also foster efficiency.



National Centre for Childhood Grief (NCCG)

My lovely wife sits on the board of this remarkable organization that helps children grieving through the loss of a parent, whatever the circumstances. These events occur every day; 5% of families in Australia are affected. These are unspoken but real tragedies for the kids. Incredibly the counselors volunteer their time. The NCCG welcomes your donations to pay for toys, books, food and other basics for the kids.

Tim Burton

according to my daughter

Another take on Bondi Beach

according to my son