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http://dx.doi.org/10.5370/KIEE.2012.61.2.187

Leader-Follower Model Analysis on Mixed Strategy Nash Equilibrium of Electricity Market with Transmission Congestion  

Lee, Kwang-Ho (단국대학교 전기공학과)
Publication Information
The Transactions of The Korean Institute of Electrical Engineers / v.61, no.2, 2012 , pp. 187-193 More about this Journal
Abstract
Nash Equilibrium (NE) is as useful tool for investigating a participant's strategic generation quantity in a competitive electricity market. Cournot model may give a mixed strategy NE instead of a pure strategy when transmission constraints are considered. A mixed strategy is difficult to compute, complicated to understand conceptually, and hard to implement in an electricity market practically. This paper presents that a mixed strategy does not appear in Stackelberg leader-follower model even under a transmission congestion. A solution method is proposed for the leader-follower model under a nondifferentiable space of a strategy variable. Based on the pure strategy NE with a transmission line congested, the merit of leader-follower model is shown from a social welfare point of view.
Keywords
Nash equilibrium; Mixed strategy; Cournot model; Leader-follower; Transmission congestion; Social welfare; Electricity market;
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