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Eddie Anderson

Eddie Anderson

MA, PhD (Cambridge)
Associate Dean (Research);
Professor

Rm 5173
H70 - Abercrombie Building
The University of Sydney
NSW 2006 Australia

Telephone +61 2 9036 7546
Fax +61 2 9351 6409
edward.anderson@sydney.edu.au

Bio

Eddie Anderson is Professor of Decision Sciences and currently holds the position of Associate Dean (Research) and Associate Dean (Research Education) at the University of Sydney Business School. Prior to joining the University of Sydney in 2008, he was at the Australian Graduate School of Management, University of New South Wales. Eddie has an honours degree in Mathematics from Cambridge, and a PhD in Operations Management, also from the University of Cambridge.

Eddie is known for work in optimization; scheduling theory and game theory. He has wide ranging interests in supply chains, particularly in relation to contracts and risk. Much of his research involves the application of these ideas in energy markets. In 2007-2008 he was Joint Director of the Centre for Energy and Environmental Markets at UNSW. He has been Area Editor for Energy at the journal Operations Research since 2012.

Risk management is also the focus of Eddie’s teaching and in 2014 he published an advanced text with Wiley: “Business Risk Management: Models and Analysis”.

Eddie has published 65 papers in international academic journals. Google Scholar shows that he has over 3500 career citations and an h-index of 31. Fourteen students have successfully completed PhDs under his supervision.

Eddie has held a succession of academic leadership roles: Associate Dean Research, AGSM, UNSW 2002-2004; Acting Dean AGSM 2006; Postgraduate Associate Dean Faculty of Business, UNSW 2006-2008; and Chair, Discipline of Business Analytics, Sydney University 2008-2013.

Research Interests

Professor Eddie Anderson began his research career by studying scheduling theory and also the modelling of optimization problems in which the decision variable is a function: these are infinite dimensional optimization problems.

More recently Eddie has focussed on the competitive interaction between firms in a supply chain context. If the number of firms is small (an oligopoly), then game theory gives some guidance as to what will happen. There are applications in many areas, but he has a particular interest in what happens in wholesale electricity markets. The balance between supply (the generators) and demand (the retailers) will determine the final price, but who will make money and how much?

An interesting aspect of wholesale electricity markets is that bids consist of a whole schedule of prices and quantities rather than just a single price or a single quantity. This makes it important to analyse optimal bidding (and also equilibria) when the players have to decide on a whole supply function.  In a series of paper from 2002 to 2013 Eddie Anderson showed how to analyse markets in which participants make supply function offers.  Much of this work has been joint with Professor Andy Philpott from the University of Auckland.

In all market places there is uncertainty about future prices, and we cannot understand the competition occurring in electricity markets without understanding and modelling this uncertainty. A big part of Eddie’s research is concerned with models that include a stochastic element. When outcomes are uncertain it is no longer enough to simply assume that everyone maximises the profit they expect to make. Instead firms are guided by the need to avoid taking on too much risk. In many markets, including electricity, firms limit their risk by buying or selling financial derivatives. We would like to know the impact of this on firm profits.

So answering questions about competition forces us to consider risk and uncertainty at the same time. Eddie has a number of papers (and a book) on risk: looking at how individuals and firms can make good decisions when there are risks attached to their actions.

The increasing use of renewables and the possibility of widespread electric vehicle usage in the future is changing the way that the electricity grid operates and providing many challenges. Eddie has expertise in electricity trading issues and these are intimately connected with the structural changes taking place in the electricity supply system: solutions need to account for both engineering and financial realities.

Eddie Anderson’s work in risk management has recently led to a new research project on understanding the risk decisions faced by farmers. Decisions are made that are both operational (e.g. the amount of fertiliser to apply) and also financial (taking out insurance or selling crops in the futures market). The current work focusses particularly on cereal crops. Taking a supply chain view of risk in an agricultural context holds the potential for significant improvements.

Selected publications

2018

Journal Article

Anderson E, and Holmberg P (2018) Price instability in multi-unit auctions Journal of Economic Theory, 175, 318-341. [More Information]

2017

Journal Article

Anderson E, Chen B, and Shao L (2017) Supplier Competition with Option Contracts for Discrete Blocks of Capacity Operations Research, 65 (4), 952-967. [More Information]

2016

Journal Article

Anderson E, Gamarnik D, Kleywegt A, and Ozdaglar A (2016) Preface to the Special Issue on Information and Decisions in Social and Economic Networks Operations Research, 64 (3), 561-563. [More Information]

2015

Journal Article

Anderson E, and Yang S (2015) The Timing of Capacity Investment with Lead Times: When Do Firms Act in Unison? Production and Operations Management, 24 (1), 21-41. [More Information]

2014

Journal Article

Yang S, and Anderson E (2014) Competition through capacity investment under asymmetric existing capacities and costs European Journal of Operational Research, 237 (1), 217-230. [More Information]

Book

Anderson E (2014) Business Risk Management: Models and Analysis; John Wiley & Sons, Chichester.

2013

Journal Articles

Anderson E (2013) On the existence of supply function equilibria Mathematical Programming, 140 (2), 323-349. [More Information]

Anderson E, Holmberg P, and Philpott A (2013) Mixed strategies in discriminatory divisible-good auctions Rand Journal of Economics, 44 (1), 1-32. [More Information]

2012

Journal Articles

Anderson E (2012) Ranking Games and Gambling: When to Quit When You're Ahead Operations Research, 60 (5), 1229-1244. [More Information]

Anderson E, and Hu X (2012) Asymmetric Supply Function Equilibria with Forward Contracts Journal of Optimization Theory and Applications, 152 (1), 198-224. [More Information]

2011

Journal Articles

Anderson E (2011) A New Model for Cycles in Retail Petrol Prices European Journal of Operational Research, 210 (2), 436-447. [More Information]

Anderson E, and Cau T (2011) Implicit collusion and individual market power in electricity markets European Journal of Operational Research, 211 (2), 403-414. [More Information]

Anderson E, Coltman T, Devinney T, and Keating B (2011) What Drives the Choice of a Third-Party Logistics Provider? Journal of Supply Chain Management: A Global Review of Purchasing and Supply, 47 (2), 97-115. [More Information]

2010

Journal Article

Anderson E, and Bao Y (2010) Price competition with integrated and decentralized supply chains European Journal of Operational Research, 200 (1), 227-234. [More Information]

2009

Journal Article

Anderson E, and Cau T (2009) Modeling Implicit Collusion Using Coevolution Operations Research, 57 (2), 439-455. [More Information]

2008

Journal Articles

Anderson E, and Hu X (2008) Finding supply function equilibria with asymmetric firms Operations Research, 56 (3), 697-711. [More Information]

Anderson E, and Hu X (2008) Forward contracts and market power in an electricity market International Journal of Industrial Organization, 26 (3), 679-694. [More Information]

2007

Journal Articles

Anderson E, Hu X, and Winchester D (2007) Forward contracts in electricity markets: The Australian experience Energy Policy, 35 (5), 3089-3103. [More Information]

Anderson E, Kelly F, Steinberg R, and Waters R (2007) Erratum: A contract and balancing mechanism for sharing capacity in a communication network Management Science, 53 (6), 1029-1031. [More Information]

Anderson E, Philpott A, and Xu H (2007) Modelling the effects of interconnection between electricity markets subject to uncertainty Mathematical Methods of Operations Research, 65 (1), 1-26. [More Information]

2006

Journal Articles

Anderson E, and Xu H (2006) Optimal supply functions in electricity markets with option contracts and non-smooth costs Mathematical Methods of Operations Research, 63 (3), 387-411. [More Information]

Anderson E, Kelly F, and Steinberg R (2006) A contract and balancing mechanism for sharing capacity in a communication network Management Science, 52 (1), 39-53. [More Information]

2005

Journal Articles

Anderson E, and Xu H (2005) Supply Function Equilibrium in Electricity Spot Markets with Contracts and Price Caps Journal of Optimization Theory and Applications, 124 (2), 257-283. [More Information]

Anderson E, and Xu H (2005) ε-optimal bidding in an electricity market with discontinuous market distribution function SIAM Journal on Control and Optimization, 44 (4), 1391-1418. [More Information]

Anderson E, and Xu H (2005) Epsilon-optimal bidding in an electricity market with discontinuous market distribution function SIAM Journal on Control and Optimization, 44 (4), 1391-1418. [More Information]

Anderson E, and Xu H (2005) Supply Function Equilibrium in Electricity Spot Markets with Contracts and Price Caps Journal of Optimization Theory and Applications, 124 (2), 257-283. [More Information]

2004

Journal Articles

Anderson E, and Potts C (2004) Online scheduling of a single machine to minimize total weighted completion time Mathematics of Operations Research, 29 (3), 686-697. [More Information]

Anderson E, and Xu H (2004) Nash equilibria in electricity markets with discrete prices Mathematical Methods of Operations Research, 60 (2), 215-238. [More Information]

2003

Journal Article

Anderson E, and Philpott A (2003) Estimation of Electricity Market Distribution Functions Annals of Operations Research, 121 (1-4), 21-32. [More Information]

Book Chapters

Anderson E, and Xu H (2003) Nash equilibria in electricity markets with fixed price points Optimization and Industry: New Frontiers; Springer, Netherlands, 141-157.

Anderson E, Glass C, and Potts C (2003) Machine Scheduling Local Search in Combinatorial Optimization; Princeton University Press, United States, 361-414.

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Recent Units Taught

  • QBUS6820 Business Risk Management

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