Application of duopoly multi-periodical game with bounded rationality in power supply market based on information asymmetry

Abstract

In the power market, each entity is not completely rational when generate strategy, and the market information held by each entity is not exactly the same. In this paper, duopoly power providers with different selling adjustment structures are simplified from the actual grid background, where one provider can sell part of its power to another at contract price to store the power. Each provider is trying to maximize its profit by adjusting its power selling strategy. The process of evolutionary game with multi-periods bounded rational is established. One provider adjusts its selling strategy through the multi-periods market price and another through its multi-periods marginal profit. The quantity of power sold by each provider will tend to Nash equilibrium and how information asymmetry affects the stability of Nash equilibrium is analyzed through comparing dynamic power selling with and without information asymmetry. Information asymmetry has a great impact on one provider but not another. The numerical simulations also show that the information asymmetry will increase the stability region of the system. Different adjustment suggestions are proposed for different providers when information asymmetry occurs.