A comparison of Nash equilibria analysis and agent-based modelling for power markets

Authored by T. Krause, E. V. Beck, R. Cherkaoui, A. Germond, G. Andersson, D. Ernst

Date Published: 2006-11

DOI: 10.1016/j.ijepes.2006.03.002

Sponsors: No sponsors listed

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Model Documentation: Other Narrative Mathematical description

Model Code URLs: Model code not found

Abstract

In this paper we compare Nash equilibria analysis and agent-based modelling for assessing the market dynamics of network-constrained pool markets. Power suppliers submit their bids to the market place in order to maximize their payoffs, where we apply reinforcement learning as a behavioral agent model. The market clearing mechanism is based on the locational marginal pricing scheme. Simulations are carried out on a benchmark power system. We show how the evolution of the agent-based approach relates to the existence of a unique Nash equilibrium or multiple equilibria in the system. Additionally, the parameter sensitivity of the results is discussed. (C) 2006 Elsevier Ltd. All rights reserved.

Tags

game theory reinforcement learning electricity market modelling