Abstract
In order to accurately simulate the game behaviors of the market participants with bounded rationality, a new dynamic Cournot game model of power market considering the constraints of transmission network is proposed in this paper. The model is represented by a discrete differential equations embedded with the maximization problem of the social benefit of market. The Nash equilibrium and its stability in a duopoly game are quantitatively analyzed. It is found that there are different Nash equilibriums with different market parameters corresponding to different operating conditions of power network, i.e., congestion and non-congestion, and even in some cases there is not Nash equilibrium at all. The market dynamic behaviors are numerically simulated, in which the periodic or chaotic behaviors are focused when the market parameters are beyond the stability region of Nash equilibrium.
Highlights
Some foundation industries, such as electric power, aviation, telecommunication, railroad, etc., are traditionally thought of having natural monopoly characteristics
This paper proposes the dynamic Cournot game model with bounded rationality considering the power network constraints, i.e., the difference equations embedded with the optimization problem
It is found that the power market has different Nash equilibriums with different market parameters corresponding to different operating conditions, i.e., congestion and non-congestion, while in some cases it has no Nash equilibrium at all
Summary
Some foundation industries, such as electric power, aviation, telecommunication, railroad, etc., are traditionally thought of having natural monopoly characteristics. Taking an extreme example of California power market, the neglected study of the dynamic market behaviors led to a severe situation causing the electric power wholesale price to rise sharply and affecting the power supply to a lot of customers This happened in less than three years of market operation, which has made a great impact on the economy of California and even the USA [1]. The remarkable characteristic of the model is twofold: it adopts a dynamic adjustment where the limit point is the Nash equilibrium of power market; and the system of discrete difference equations embedded with the maximization problem considers the constraints of power network. Dynamic Cournot Game Model of Power Market with Bounded Rationality Considering Network Constraints
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