Abstract
PurposeThe purpose of this paper is to study the influence of different trade modes on the electricity market.Design/methodology/approachA linear model between power units' output and their bidding prices is presented and optimal models to minimize the purchase power cost of power grid companies are presented, applying static games and dynamic games, respectively. Then the relation between power generation amount and units' bidding price is settled by using difference methods. In addition, optimization models are established to optimize profits of units at discriminatory bidding or uniform marginal price applying static game and dynamic game. Finally, the economic benefits and fair competition are compared and analyzed.FindingsIf impartiality is emphasized, the detailed history bidding information should not be opened. Also, it is fairer but difficult to control units' speculative behavior at uniform marginal price.Research limitations/implicationsA supposition has been made that all participants are rational.Practical implicationsThe paper presents useful advice for improving the trade mode of the electricity market.Originality/valuePower units' bidding models and strategies are presented at discriminatory bidding price or at uniform marginal price applying non‐cooperation static game and dynamic game, respectively.
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