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http://dx.doi.org/10.5370/JEET.2014.9.1.090

Strategy Equilibrium in Stackelberg Model with Transmission Congestion in Electricity Market  

Lee, Kwang-Ho (Department of Electrical Engineering, Dankook University)
Publication Information
Journal of Electrical Engineering and Technology / v.9, no.1, 2014 , pp. 90-97 More about this Journal
Abstract
Nash Cournot Equilibrium (NCE) has been widely used in a competitive electricity market to analyze generation firms' strategic production quantities. Congestion on a transmission network may lead to a mixed strategy NCE. Mixed strategy is complicated to understand, difficult to compute, and hard to implement in practical market. However, Stackelberg model based equilibrium does not have any mixed strategy, even under congestion in a transmission line. A guide to understanding mixed strategy equilibrium is given by analyzing a cycling phenomenon in the players' best choices. This paper connects the concept of leader-follower in Stackelberg model with relations between generation firms on both sides of the congested line. From the viewpoint of social welfare, the surplus analysis is presented for comparison between the NCE and the Stackelberg equilibrium (SE).
Keywords
Stackelberg model; Nash equilibrium; Cournot model; Mixed strategy; Congestion; Social welfare; Leader-follower; Duopoly; Electricity market;
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Times Cited By KSCI : 2  (Citation Analysis)
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