Engagement strategies and market power: an application to the natural gas market.

Summary This thesis focuses on commitment strategies in imperfect competition in the natural gas market. The first chapter deals with capacity investments in a bilateral relationship where the buyer is subject to expropriation risk. Although a minimum degree of commitment is essential to secure the investment, too long a commitment by the seller may lead to a lower level of investment. The second chapter analyzes the strategic use of storage in a double oligopoly: while storage may be used to preempt future demand, firms may nevertheless have an incentive to commit not to use it. The third chapter analyzes gas release programs aimed at enhancing competition in the gas supply market by giving entrants access to the incumbent's long-term contracts with foreign producers. Finally, the fourth chapter shows that the use of real asset pricing methods based on arbitrage transactions in wholesale markets may not lead to optimal investment choices.