Analysis of an imperfectly competitive cellulosic biofuel supply chain

• Study strategic behavior in an imperfectly competitive biofuel supply chain.
• Develop market models, considering both perfect and imperfect competitions.
• Deploy a quantity-based (Nash-Cournot) setting to model the imperfect competitions.
• Apply the models to an illustrative case study of California.

We study the strategic behavior in an imperfectly competitive cellulosic biofuel supply chain. An optimization-based supply chain model is used to obtain long-run planning outcomes, based on which we develop market models considering both perfect and imperfect competitions. The equilibrium among stakeholders in the multi-echelon supply chain can be obtained by solving a collection of first-order conditions associated with their profit-maximization problems. For the imperfect competition, the model, additionally, allows firms with significant market share at different segment of the supply chain to exercise market power. We apply the models to an illustrative case study of California.