Loss Aversion, cheap capacity and investment in the Energy Game

In our last session of the Energy Game, players responded to a higher uncertainty about demand, and to the introduction of fossil-fuel power plants, with much higher production capacities:

Before the uncertainty increase, the average production capacity of a player was about 600 GWh/Rnd

Here are a few energy fleet the year after, following an increased uncertainty (same expectations about demand but with a higher variation coefficient: 0.3 instead of 0.15) and the introduction of fossil-fuel power plants.

EnergyMixHighUncertaintyOn most markets, total installed capacity exceeds 1400GWh/Round, even though the probability to have a shortage with that capacity is only about 0.6%.

 

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