Professor Emeritus Eddie Anderson
Eddie Anderson is Professor of Decision Sciences and previously held 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.
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.
- QBUS6820 Business Risk Management
Selected publications
Publications
Books
- Anderson, E. (2014). Business Risk Management: Models and Analysis. Chichester: John Wiley & Sons.
- Anderson, E. (2013). Business Risk Management: Models and Analysis. Chichester: John Wiley & Sons. [More Information]
Book Chapters
- Anderson, E., Glass, C., Potts, C. (2003). Machine Scheduling. In E Aarts and J.K Lenstra (Eds.), Local Search in Combinatorial Optimization, (pp. 361-414). United States: Princeton University Press.
- Anderson, E., Xu, H. (2003). Nash equilibria in electricity markets with fixed price points. In P.M Pardalos and V Korotkikh (Eds.), Optimization and Industry: New Frontiers, (pp. 141-157). Netherlands: Springer.
- Anderson, E., Philpott, A. (2002). On supply function bidding in electricity markets. In C Greengard and A Ruszczynski (Eds.), Decision Making Under Uncertainty: Energy and Power, (pp. 115-133). United States: Springer.
Journals
- Anderson, E., Jiang, H., Shao, L. (2023). Competitive contract design in a retail supply chain under demand uncertainty. Naval Research Logistics, 70(7), 691-707. [More Information]
- Veldman, J., Anderson, E., Pulles, N., Gaalman, G. (2023). Developing a shared supplier with endogenous spillovers. Production and Operations Management, 32(3), 723-739. [More Information]
- Anderson, E., Zachary, S. (2023). Minimax decision rules for planning under uncertainty: Drawbacks and remedies. European Journal of Operational Research, 311(2), 789-800. [More Information]
Conferences
- Anderson, E., Cau, T. (2002). A co-evolutionary approach to modeling the behaviour of participants in competitive electricity markets. 2002 IEEE PES Summer Meeting, Chicago, USA: Institute of Electrical and Electronics Engineers - Power & Energy Society.
- Anderson, E., Potts, C. (2002). On-line scheduling of a single machine to minimize total weighted completion time. 13th ACM-SIAM Symposium on Discrete Algorithms, Philadelphia, PA, USA: Society for Industrial & Applied Mathematics.
2023
- Anderson, E., Jiang, H., Shao, L. (2023). Competitive contract design in a retail supply chain under demand uncertainty. Naval Research Logistics, 70(7), 691-707. [More Information]
- Veldman, J., Anderson, E., Pulles, N., Gaalman, G. (2023). Developing a shared supplier with endogenous spillovers. Production and Operations Management, 32(3), 723-739. [More Information]
- Anderson, E., Zachary, S. (2023). Minimax decision rules for planning under uncertainty: Drawbacks and remedies. European Journal of Operational Research, 311(2), 789-800. [More Information]
2022
- Anderson, E., Chen, B., Shao, L. (2022). Capacity Games with Supply Function Competition. Operations Research, 70(4), 1969-1983. [More Information]
2020
- Anderson, E., Prokhorov, A., Zhu, Y. (2020). A Simple Estimator of Two‐Dimensional Copulas, with Applications. Oxford Bulletin of Economics and Statistics, 82(6), 1375-1412. [More Information]
- Shao, L., Anderson, E., Chen, B. (2020). Achieving efficiency in capacity procurement. Foundations and Trends in Technology, Information and Operations Management, 14(1-2), 138-154. [More Information]
- Qian, C., Anderson, E. (2020). Buyer's optimal information revelation strategy in procurement auctions. European Journal of Operational Research, 283(3), 1011-1025. [More Information]
2019
- Anderson, E., Monjardino, M. (2019). Contract design in agriculture supply chains with random yield. European Journal of Operational Research, 277(3), 1072-1082. [More Information]
- Anderson, E., Philpott, A. (2019). Forward Commodity Trading with Private Information. Operations Research, 67(1), 58-71. [More Information]
2018
- Anderson, E., Holmberg, P. (2018). Price instability in multi-unit auctions. Journal of Economic Theory, 175, 318-341. [More Information]
2017
- Anderson, E., Chen, B., Shao, L. (2017). Supplier Competition with Option Contracts for Discrete Blocks of Capacity. Operations Research, 65(4), 952-967. [More Information]
2016
- Anderson, E., Gamarnik, D., Kleywegt, A., 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
- Anderson, E., 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
- Anderson, E. (2014). Business Risk Management: Models and Analysis. Chichester: John Wiley & Sons.
- Yang, S., Anderson, E. (2014). Competition through capacity investment under asymmetric existing capacities and costs. European Journal of Operational Research, 237(1), 217-230. [More Information]
2013
- Anderson, E. (2013). Business Risk Management: Models and Analysis. Chichester: John Wiley & Sons. [More Information]
- Anderson, E., Holmberg, P., Philpott, A. (2013). Mixed strategies in discriminatory divisible-good auctions. Rand Journal of Economics, 44(1), 1-32. [More Information]
- Anderson, E. (2013). On the existence of supply function equilibria. Mathematical Programming, 140(2), 323-349. [More Information]
2012
- Anderson, E., Hu, X. (2012). Asymmetric Supply Function Equilibria with Forward Contracts. Journal of Optimization Theory and Applications, 152(1), 198-224. [More Information]
- Anderson, E. (2012). Ranking Games and Gambling: When to Quit When You're Ahead. Operations Research, 60(5), 1229-1244. [More Information]
2011
- 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., 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., 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
- Anderson, E., Bao, Y. (2010). Price competition with integrated and decentralized supply chains. European Journal of Operational Research, 200(1), 227-234. [More Information]
2009
- Anderson, E., Cau, T. (2009). Modeling Implicit Collusion Using Coevolution. Operations Research, 57(2), 439-455. [More Information]
2008
- Anderson, E., Hu, X. (2008). Finding supply function equilibria with asymmetric firms. Operations Research, 56(3), 697-711. [More Information]
- Anderson, E., Hu, X. (2008). Forward contracts and market power in an electricity market. International Journal of Industrial Organization, 26(3), 679-694. [More Information]
2007
- Anderson, E., Kelly, F., Steinberg, R., 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., Hu, X., Winchester, D. (2007). Forward contracts in electricity markets: The Australian experience. Energy Policy, 35(5), 3089-3103. [More Information]
- Anderson, E., Philpott, A., 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
- Anderson, E., Kelly, F., Steinberg, R. (2006). A contract and balancing mechanism for sharing capacity in a communication network. Management Science, 52(1), 39-53. [More Information]
- Anderson, E., 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]
2005
- Anderson, E., 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., 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
- Anderson, E., Xu, H. (2004). Nash equilibria in electricity markets with discrete prices. Mathematical Methods of Operations Research, 60(2), 215-238. [More Information]
- Anderson, E., 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]
2003
- Anderson, E., Philpott, A. (2003). Estimation of Electricity Market Distribution Functions. Annals of Operations Research, 121(1-4), 21-32. [More Information]
- Anderson, E., Glass, C., Potts, C. (2003). Machine Scheduling. In E Aarts and J.K Lenstra (Eds.), Local Search in Combinatorial Optimization, (pp. 361-414). United States: Princeton University Press.
- Anderson, E., Xu, H. (2003). Nash equilibria in electricity markets with fixed price points. In P.M Pardalos and V Korotkikh (Eds.), Optimization and Industry: New Frontiers, (pp. 141-157). Netherlands: Springer.
2002
- Anderson, E., Cau, T. (2002). A co-evolutionary approach to modeling the behaviour of participants in competitive electricity markets. 2002 IEEE PES Summer Meeting, Chicago, USA: Institute of Electrical and Electronics Engineers - Power & Energy Society.
- Anderson, E. (2002). Markov chain modeling of the solution surface in local search. Journal of the Operational Research Society, 53(6), 630-636. [More Information]
- Anderson, E., Xu, H. (2002). Necessary and sufficient conditions for optimal offers in electricity markets. SIAM Journal on Control and Optimization, 41(4), 1212-1228.
Selected Grants
2017
- Digitally Decommoditised Agriculture: an Almond Example, Gradziel T, McBratney A, Stockmann U, McConchie R, Minasny B, Anderson E, Malone B, Phan-Thien K, Possell M, Wilson N, Office of Global Engagement/Partnership Collaboration Awards
2016
- Robust optimization under uncertainty with limited data, Anderson E, Philpott A, Royal Society of New Zealand/Marsden Fund Grant