IDEAS home Printed from https://ideas.repec.org/p/ira/wpaper/201513.html
   My bibliography  Save this paper

“Fast Charging Stations: Simulating Entry and Location in a Game of Strategic Interaction”

Author

Listed:
  • Valeria Bernardo

    (Faculty of Economics, University of Barcelona)

  • Joan-Ramon Borrell

    (Faculty of Economics, University of Barcelona)

  • Jordi Perdiguero

    (Faculty of Economics, Universitat Autònoma de Barcelona)

Abstract

This paper uses a game of strategic interaction to simulate entry and location of fast charging stations for electric vehicles. It evaluates the equilibria obtained in terms of social welfare and firm spatial differentiation. Using Barcelona mobility survey, demographic data and the street graph we find that only at an electric vehicle penetration rate above 3% does a dense network of stations appear as the equilibrium outcome of a market with no fiscal transfers. We also find that price competition drives location differentiation measured not only in Euclidean distances but also in consumer travel distances.

Suggested Citation

  • Valeria Bernardo & Joan-Ramon Borrell & Jordi Perdiguero, 2015. "“Fast Charging Stations: Simulating Entry and Location in a Game of Strategic Interaction”," IREA Working Papers 201513, University of Barcelona, Research Institute of Applied Economics, revised May 2015.
    • Handle: RePEc:ira:wpaper:201513
    as

    Download full text from publisher

    File URL: http://www.ub.edu/irea/working_papers/2015/201513.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Joan-Ramon Borrell & Laura Fernández-Villadangos, 2010. "Clustering or scattering: the underlying reason for regulating distance among retail outlets," Working Papers XREAP2010-12, Xarxa de Referència en Economia Aplicada (XREAP), revised Dec 2010.
    2. Espey, Molly, 1998. "Gasoline demand revisited: an international meta-analysis of elasticities," Energy Economics, Elsevier, vol. 20(3), pages 273-295, June.
    3. Jenn, Alan & Azevedo, Inês L. & Ferreira, Pedro, 2013. "The impact of federal incentives on the adoption of hybrid electric vehicles in the United States," Energy Economics, Elsevier, vol. 40(C), pages 936-942.
    4. Borenstein, Severin & Netz, Janet, 1999. "Why do all the flights leave at 8 am?: Competition and departure-time differentiation in airline markets," International Journal of Industrial Organization, Elsevier, vol. 17(5), pages 611-640, July.
    5. Osborne, Martin J & Pitchik, Carolyn, 1987. "Equilibrium in Hotelling's Model of Spatial Competition," Econometrica, Econometric Society, vol. 55(4), pages 911-922, July.
    6. Bajari, Patrick & Hong, Han & Krainer, John & Nekipelov, Denis, 2010. "Estimating Static Models of Strategic Interactions," Journal of Business & Economic Statistics, American Statistical Association, vol. 28(4), pages 469-482.
    7. Elizalde, Javier, 2013. "Competition in multiple characteristics: An empirical test of location equilibrium," Regional Science and Urban Economics, Elsevier, vol. 43(6), pages 938-950.
    8. Pinkse, Joris & Slade, Margaret E., 1998. "Contracting in space: An application of spatial statistics to discrete-choice models," Journal of Econometrics, Elsevier, vol. 85(1), pages 125-154, July.
    9. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521766555, January.
    10. Larson, Paul D. & Viáfara, Jairo & Parsons, Robert V. & Elias, Arne, 2014. "Consumer attitudes about electric cars: Pricing analysis and policy implications," Transportation Research Part A: Policy and Practice, Elsevier, vol. 69(C), pages 299-314.
    11. Pennerstorfer, Dieter & Weiss, Christoph, 2013. "Spatial clustering and market power: Evidence from the retail gasoline market," Regional Science and Urban Economics, Elsevier, vol. 43(4), pages 661-675.
    12. Berry, Steven & Levinsohn, James & Pakes, Ariel, 1995. "Automobile Prices in Market Equilibrium," Econometrica, Econometric Society, vol. 63(4), pages 841-890, July.
    13. Buenstorf, Guido & Klepper, Steven, 2010. "Why does entry cluster geographically? Evidence from the US tire industry," Journal of Urban Economics, Elsevier, vol. 68(2), pages 103-114, September.
    14. Helveston, John Paul & Liu, Yimin & Feit, Elea McDonnell & Fuchs, Erica & Klampfl, Erica & Michalek, Jeremy J., 2015. "Will subsidies drive electric vehicle adoption? Measuring consumer preferences in the U.S. and China," Transportation Research Part A: Policy and Practice, Elsevier, vol. 73(C), pages 96-112.
    15. Schroeder, Andreas & Traber, Thure, 2012. "The economics of fast charging infrastructure for electric vehicles," Energy Policy, Elsevier, vol. 43(C), pages 136-144.
    16. d'Aspremont, C & Gabszewicz, Jean Jaskold & Thisse, J-F, 1979. "On Hotelling's "Stability in Competition"," Econometrica, Econometric Society, vol. 47(5), pages 1145-1150, September.
    17. Janet S. Netz & Beck A. Taylor, 2002. "Maximum Or Minimum Differentiation? Location Patterns Of Retail Outlets," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 162-175, February.
    18. Brons, Martijn & Nijkamp, Peter & Pels, Eric & Rietveld, Piet, 2008. "A meta-analysis of the price elasticity of gasoline demand. A SUR approach," Energy Economics, Elsevier, vol. 30(5), pages 2105-2122, September.
    19. Jean-Francois Houde, 2012. "Spatial Differentiation and Vertical Mergers in Retail Markets for Gasoline," American Economic Review, American Economic Association, vol. 102(5), pages 2147-2182, August.
    20. Katja Seim, 2006. "An empirical model of firm entry with endogenous product‐type choices," RAND Journal of Economics, RAND Corporation, vol. 37(3), pages 619-640, September.
    21. Parsons, George R. & Hidrue, Michael K. & Kempton, Willett & Gardner, Meryl P., 2014. "Willingness to pay for vehicle-to-grid (V2G) electric vehicles and their contract terms," Energy Economics, Elsevier, vol. 42(C), pages 313-324.
    22. Salvanes, Kjell G. & Steen, Frode & Sorgard, Lars, 2005. "Hotelling in the air? Flight departures in Norway," Regional Science and Urban Economics, Elsevier, vol. 35(2), pages 193-213, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Motoaki, Yutaka & Shirk, Matthew G., 2017. "Consumer behavioral adaption in EV fast charging through pricing," Energy Policy, Elsevier, vol. 108(C), pages 178-183.
    2. Park, Junseok & Moon, Ilkyeong, 2023. "A facility location problem in a mixed duopoly on networks," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 175(C).
    3. Motoaki, Yutaka & Yi, Wenqi & Salisbury, Shawn, 2018. "Empirical analysis of electric vehicle fast charging under cold temperatures," Energy Policy, Elsevier, vol. 122(C), pages 162-168.
    4. Yang, Woosuk, 2018. "A user-choice model for locating congested fast charging stations," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 110(C), pages 189-213.
    5. Han Wu & Dongxiao Niu, 2017. "Study on Influence Factors of Electric Vehicles Charging Station Location Based on ISM and FMICMAC," Sustainability, MDPI, vol. 9(4), pages 1-19, March.
    6. Soetevent, Adriaan R., 2021. "I’d Like to Move It! Consumption Rivalry in the EV Public Charging Market: Demand Estimation with Deterministic Choice Set Variation," EconStor Preprints 228520, ZBW - Leibniz Information Centre for Economics.
    7. Arlt, Marie-Louise & Astier, Nicolas, 2023. "Do retail businesses have efficient incentives to invest in public charging stations for electric vehicles?," Energy Economics, Elsevier, vol. 124(C).
    8. Soetevent, Adriaan R., 2024. "I’d like to move it! The effect of consumption rivalry on demand estimation: Evidence from the EV public charging market," Journal of Environmental Economics and Management, Elsevier, vol. 124(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yi Deng & Gabriel Picone, 2013. "Strategic Clustering and Competition by Alcohol Retailers: An Emperical Anlysis of Entry and Location Decisions," Working Papers 1013, University of South Florida, Department of Economics.
    2. Adriana Nikolic & Christoph Weiss, 2014. "Spatial interactions in location decisions: Empirical evidence from a Bayesian spatial probit model," Department of Economics Working Papers wuwp177, Vienna University of Economics and Business, Department of Economics.
    3. Mitsukuni Nishida, 2015. "Estimating a Model of Strategic Network Choice: The Convenience-Store Industry in Okinawa," Marketing Science, INFORMS, vol. 34(1), pages 20-38, January.
    4. Noel, Lance & Papu Carrone, Andrea & Jensen, Anders Fjendbo & Zarazua de Rubens, Gerardo & Kester, Johannes & Sovacool, Benjamin K., 2019. "Willingness to pay for electric vehicles and vehicle-to-grid applications: A Nordic choice experiment," Energy Economics, Elsevier, vol. 78(C), pages 525-534.
    5. Kuangnen Cheng & Hui-Ping Chen & Jason Lee, 2015. "Competition behavior in service frequency for U.S. airlines," Service Business, Springer;Pan-Pacific Business Association, vol. 9(1), pages 1-16, March.
    6. Darlene Chisholm & George Norman, 2012. "Spatial competition and market share: an application to motion pictures," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 36(3), pages 207-225, August.
    7. Lijesen, M.G., 2010. "Empirical applications of spatial competition; an interpretative literature review," Serie Research Memoranda 0006, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
    8. Brickley, James A. & Linck, James S. & Smith, Clifford Jr., 2003. "Boundaries of the firm: evidence from the banking industry," Journal of Financial Economics, Elsevier, vol. 70(3), pages 351-383, December.
    9. Yetiskul, Emine & Kanafani, Adib, 2010. "How the presence of low-cost carrier competition scheduling differentiation," Journal of Air Transport Management, Elsevier, vol. 16(1), pages 7-11.
    10. Nicolai V. Kuminoff & V. Kerry Smith & Christopher Timmins, 2010. "The New Economics of Equilibrium Sorting and its Transformational Role for Policy Evaluation," NBER Working Papers 16349, National Bureau of Economic Research, Inc.
    11. Koster, Hans R.A. & Pasidis, Ilias & van Ommeren, Jos, 2019. "Shopping externalities and retail concentration: Evidence from dutch shopping streets," Journal of Urban Economics, Elsevier, vol. 114(C).
    12. Yi Deng & Gabriel Picone, 2019. "An empirical analysis of entry and location decisions by bars and liquor stores," Empirical Economics, Springer, vol. 57(5), pages 1751-1782, November.
    13. Firgo, Matthias & Kügler, Agnes, 2018. "Cooperative pricing in spatially differentiated markets," Regional Science and Urban Economics, Elsevier, vol. 73(C), pages 51-67.
    14. Martin, Simon, 2020. "Market transparency and consumer search - Evidence from the German retail gasoline market," DICE Discussion Papers 350, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    15. Paul Ellickson & Sanjog Misra, 2012. "Enriching interactions: Incorporating outcome data into static discrete games," Quantitative Marketing and Economics (QME), Springer, vol. 10(1), pages 1-26, March.
    16. Qian, Lixian & Grisolía, Jose M. & Soopramanien, Didier, 2019. "The impact of service and government-policy attributes on consumer preferences for electric vehicles in China," Transportation Research Part A: Policy and Practice, Elsevier, vol. 122(C), pages 70-84.
    17. Haiqing Xu, 2010. "Social Interactions: A Game Theoretic Approach," Department of Economics Working Papers 130914, The University of Texas at Austin, Department of Economics.
    18. Kim, Junghun & Seung, Hyunchan & Lee, Jongsu & Ahn, Joongha, 2020. "Asymmetric preference and loss aversion for electric vehicles: The reference-dependent choice model capturing different preference directions," Energy Economics, Elsevier, vol. 86(C).
    19. Donna, Javier D., 2018. "Measuring Long-Run Price Elasticities in Urban Travel Demand," MPRA Paper 90059, University Library of Munich, Germany.
    20. Richards, Timothy J. & Gómez, Miguel I. & Pofahl, Geoffrey, 2012. "A Multiple-discrete/Continuous Model of Price Promotion," Journal of Retailing, Elsevier, vol. 88(2), pages 206-225.

    More about this item

    Keywords

    Regional Planning; Electric Vehicle; Fast Charging; Games of Strategic Interaction; Entry Models JEL classification: Q48; Q58; L13; L43; R53;
    All these keywords.

    JEL classification:

    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • R53 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Public Facility Location Analysis; Public Investment and Capital Stock

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ira:wpaper:201513. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Alicia García (email available below). General contact details of provider: https://edirc.repec.org/data/feubaes.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.