Dynamics of Cournot Game of Electricity Market with Bounded Rationality Considering Transmission Constraints

Abstract

In electricity market environment, it is important for market operators and market participants to analyze and master the dynamic behavior of market. In order to accurately model the game behaviors of market participants with bounded rationality, this paper proposes the dynamic Cournot game model with bounded rationality considering transmission constraints. With this model, the Nash equilibrium and its stability of duopoly game are qualitatively analyzed, indicating that in electricity market there are different Nash equilibriums in different market parameters and operational conditions of transmission network, i.e., congestion and non-congestion, and even in some cases there is not Nash equilibrium at all. Then, the effect of some market parameters is discussed on the stability of electricity market. Based on the duopoly game model, the market dynamic behaviors are numerically simulated, in which the periodic or chaotic behaviors are focused when the market parameters are out of the stability region of Nash equilibrium