Cooperative solutions for the Eurasian gas network

Cooperative solutions for the Eurasian gas network
Ekaterina Orlova (2014)

Abstract

Recent research of power structure in the natural gas networks provided the evidence of strong dependence of results on the cooperative solution. We use the model of the Eurasian natural gas supply system, developed in Hubert & Orlova (2014b), to relate the Shapley value and the nucleolus to the core. As the computed Shapley value is never in the core, we introduce criteria to assess the degree of instability of the Shapley value. We relax the strong e-core with respect to the size of deviating coalitions. Using the ne-core we present three stability measures. We find that liberalization increases the degree of instability of the Shapley value for all metrics. To relate the nucleolus and the core, we study the impact of reform on the core. Liberalization consecutively compresses the core. In our real world game the change of the nucleolus tends to be misleading with respect to the pattern of the effect of liberalization on the core.

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