An empirical study of applied game theory: transmission constrained Cournot behavior

An empirical study of applied game theory: transmission constrained Cournot behavior

Restructured energy markets present opportunities for the exercise of market power, meaning market players can potentially maintain prices in excess of competitive prices. In this paper, we investigate Cournot equilibrium in a simple example network. We analyze three market players in a transmission...

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Veröffentlicht in:IEEE transactions on power systems 2002-02, Vol.17 (1), p.166-172
Hauptverfasser: Cunningham, L.B., Baldick, R., Baughman, M.L.
Format: Artikel
Sprache:eng
Schlagworte:
Breaking down
Constraint theory
Constraints
Costs
Electricity supply industry
Empirical analysis
Environmental economics
Forward contracts
Game theory
Marketing
Markets
Networks
Players
Power industry
Power system economics
Power system modeling
Pricing
Strategy
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Zusammenfassung:Restructured energy markets present opportunities for the exercise of market power, meaning market players can potentially maintain prices in excess of competitive prices. In this paper, we investigate Cournot equilibrium in a simple example network. We analyze three market players in a transmission-constrained system and consider nonconstant marginal cost. Several scenarios are evaluated that show a pure strategy equilibrium can break down even when a transmission constraint exceeds the value of the unconstrained Cournot equilibrium line flow.
ISSN:0885-8950
1558-0679
DOI:10.1109/59.982209