Integrating Bottom-Up into Top-Down: A Mixed Complementarity Approach

55 Pages Posted: 8 Aug 2005 Last revised: 19 Aug 2008

See all articles by Christoph Böhringer

Christoph Böhringer

University of Oldenburg - Economic Policy; Centre for European Economic Research (ZEW)

Thomas F. Rutherford

Centre for Energy Policy and Economics

Date Written: 2005

Abstract

We motivate the formulation of market equilibria as a mixed complementarity problem (MCP) in order to bridge the gap between bottom-up energy system models and top-down general equilibrium models for energy policy analysis. Our objective is primarily pedagogic. We first lay out that the MCP approach provides an explicit representation of weak inequalities and complementarity between decision variables and market equilibrium conditions. This permits us to combine bottom-up technological details and top-down economic richness in a single mathematical format. We then provide a stylized example of how to integrate bottom-up features into a top-down modeling framework along with worked examples and computer programs which illustrate our approach.

Keywords: Energy Policy, Computable General Equilibrium, Bottom-Up, Top-Down

JEL Classification: C61, C68, D58, Q43

Suggested Citation

Bohringer, Christoph and Rutherford, Thomas F., Integrating Bottom-Up into Top-Down: A Mixed Complementarity Approach (2005). ZEW - Centre for European Economic Research Discussion Paper No. 05-028, Available at SSRN: https://ssrn.com/abstract=770725 or http://dx.doi.org/10.2139/ssrn.770725

Christoph Bohringer (Contact Author)

University of Oldenburg - Economic Policy ( email )

Centre for European Economic Research (ZEW) ( email )

D-68161 Mannheim
Germany
+49 6211235200 (Phone)
+49 6211235226 (Fax)

Thomas F. Rutherford

Centre for Energy Policy and Economics ( email )

ETH-Zentrum
Zurich, CH-8092
United States
+41 (0)44/632 6359 (Phone)
+41 (0)44/632 1622 (Fax)

HOME PAGE: http://www.cepe.ethz.ch/

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
224
Abstract Views
1,562
rank
169,694
PlumX Metrics