Complex dynamics of Cournot game with bounded rationality in an oligopolistic electricity market

Abstract

In order to accurately simulate the dynamic decision-making behaviors of market participants, a novel dynamic Cournot game model with bounded rationality of electricity market that considers the constraints of realistic power networks is proposed in this paper. This model is represented by discrete difference equations embedded within the optimization problem of consumption benefits. The Nash equilibrium of electricity market and its stability 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 no Nash equilibrium at all. Numerical simulations with the 2-node and IEEE 30-node systems are carried out to evaluate the dynamic behaviors of electricity market, especially the periodic and chaotic behaviors when the market parameters are beyond the stability region of Nash equilibrium.