Reanalysis of “Nash Equilibrium Bidding Strategies in a Bilateral Electricity Market”

Abstract

We reanalyze a bilateral electricity market model, previously presented in , where suppliers own multiple generators. We clarify some implicit assumptions in the model and prove that, under one detailed specification of the assumptions, the previously suggested Nash equilibria for the model are inconsistent with the definition of Nash equilibrium. We discuss the implications and comment on the relationship to multiple unit auction theory.