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Analysis on Incomplete Information in an Electricity Market using Game Theory  

Lee, Kwang-Ho (단국대 전기공학과)
Shin, Jae-Hong (단국대 전기공학과)
Publication Information
The Transactions of the Korean Institute of Electrical Engineers A / v.55, no.5, 2006 , pp. 214-219 More about this Journal
Abstract
Oligopoly differs from perfect competition and monopoly in that a firm must consider rival firms' behavior to determine its own best policy. This interrelationship among firms is the issue examined in this paper. In the oligopoly market, the complete information market means that each producer has full information about itself, the market, and its rivals. That is, each producer knows the market demand function, its own cost function and the cost functions of rivals. On the other hand, the incomplete information market means that in general each producer lacks full information about the market or its rivals. Here, we assume that each firm doesn't know the cost functions and the strategic biddings of its rivals. The main purpose of this paper is to analyze firm' strategic behaviors and equilibrium in an electricity market with incomplete information. In the case study, the complete information market and the incomplete market are compared at the Nash Equilibrium from the viewpoints of market price, transaction quantities, consumer benefits, and Social Welfare.
Keywords
Incomplete Information; Nash Equilibrium; Market Price; Consumer Benefits; Social Welfare;
Citations & Related Records
Times Cited By KSCI : 2  (Citation Analysis)
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