allocation of fixed transmission cost to wheeling transactions by cooperative game theory this paper describes a methodology to allocate the cost of transmission network facilities to wheeling transactions in decentralized power systems the authors propose that the responsibility placed on transmission facilities involved in each transaction be according to the transmission usage pattern their proposal incorporates the mw mile method and considers economies of scale of transmission network facilities they also incorporate a nucleolus scheme in the cooperative game theory to deal with matters of conflict the applicability of their method is demonstrated in a numerical example

alternative models of restructured electricity systems part 1 no market power different equilibrium concepts have been proposed by various authors schweppe et al hogan et al chao and peck wu et al to analyse competitive electricity systems we establish correspondences between these different models through a single framework and provide additional interpretations of these equilibrium concepts this unifying conceptual view also provides a computationally feasible approach to simulate the market it also opens the way to the modeling of some imperfect markets

effect of inter temporal factors on the real time pricing of electricity a rigorous theoretical framework for the solution of the price formation and optimal dispatch problems taking into account intertemporal dependence of demand under spot and dynamic tariffs is presented the case in which a common tariff is to be applied to all customers is examined the difference in system response for spot and day ahead dynamic tariffs is illustrated simulation examples of a variety of event types are provided

electoral competition in heterogeneous districts this paper considers a model of elections in which parties compete simultaneously for multiple districts i show that if districts are heterogeneous then a unique two party equilibrium exists under plurality rule in which further entry is deterred the equilibrium requires that parties choose noncentrist policy platforms and not converge to the ideal policy of the median voter these characteristics are consistent with empirical observation in contrast to those of single district models necessary and sufficient conditions for the existence of the equilibrium are then characterized and related to duverger s law the existence of multiple party equilibria in this environment is also considered

mechanisms for incentive regulation theory and experiment this article develops the theoretical properties of a new incentive mechanism for regulating a monopoly seller and reports the results of laboratory experimental tests of its behavioral properties the design of the new mechanism draws upon the results of our earlier experimental research on the behavioral properties of two other mechanisms one by loeb and magat 1979 and a second by finsinger and vogelsang 1981 as with finsinger and vogelsang the new mechanism weakens loeb and magat s requirement that regulators have complete knowledge of market demand the new mechanism however is not subject to the destabilizing profit destroying cycles of nonoptimal behavior observed with finsinger and vogelsang s

modeling load recovery impact for demand response applications in this paper we develop a novel mathematical model to describe the localized economic impact of load recovery by electricity consumers following demand response dr event participation in this model termed securitization cost and benefit associated with an amount of load recovery change exponentially with time varying stochastic discount rates these volatile rates which can be estimated using the principle of brownian motion are further examined via case studies on the roy billinton test system a formal application of the proposed recovery model to the crucial task of global dr scheduling is then studied the study indicates that it is possible to optimize a dr schedule to cater for uncertainty in the subsequent load recovery

the stability of power system markets market equilibrium conditions can be derived from more general dynamic equations describing the marketplace dynamic equations provide insights into the behavior and stability of markets which are not available from static models for example markets with a single supplier with declining linear costs economies of scale may or may not be stable depending on specific cost characteristics markets with more than one supplier with declining linear costs are always unstable this paper illustrates a situation where the removal of congestion makes a market unstable

on walrasian equilibrium for pool based electricity markets we present a single time period decentralized electricity market clearing model that includes reactive power and demand responsiveness in addition to the more common framework of generation side competition for the real power commodity the approach allows self interested agents namely producers and consumers independently to maximize their individual surpluses subject to prices this is consistent with the very notion of a competitive market as defined in equilibrium theory an auctioneer computes equilibrium prices that achieve power balance at every network node as required by kirchhoff s laws the overall scheme is justified by duality theory for which there is a rich theoretical support and convergence is achieved using a newton price updating algorithm

elections coalitions and legislative outcomes predictions of electoral behavior in a multiparty setting should be a function of the voters beliefs about how parties will perform following an election similarly party behavior in a legislature should be a function of electoral promises and rewards we develop a multistage game theoretic model of three party competition under proportional representation the final policy outcome of the game is generated by a noncooperative bargaining game between the parties in the elected legislature this game is essentially defined by the vote shares each party receives in the general election and the parties electoral policy positions at the electoral stage parties and voters are strategic in that they take account of the legislative implications of any electoral outcome we solve for equilibrium electoral positions by the parties and final policy outcomes

evaluation of regulatory impacts on dynamic behavior of investments in electricity markets a new hybrid dp game framework a new hybrid framework based on game theory and dynamic programming dp with random demands and prices is proposed for studying the impacts of regulatory interventions on the dynamics of investment in power generation in electricity markets in our approach using markov chains the electric demand and growth of fuel prices have been modeled dp has been used for solving the generation expansion planning gep problem investment strategies of other investors in the market are modeled as constraints the income of the investor is calculated by modeling strategic interactions among market players in the spot energy market the cournot game concept has been applied and the nash equilibrium is calculated for each state and stage of dp simulation results confirm that the proposed framework is an appropriate decision support tool that provides useful information about dynamics of investment

impacts of network constraints on electricity market equilibrium nash equilibrium is usually used as the solution of generator s strategic bidding in electricity markets the available literature has shown by simulation that multiple market equilibria or no pure equilibrium may be induced after the inclusion of network constraints transmission constraints this paper presents a systematical analysis for the impacts of network constraints on the market equilibrium in oligopolistic electricity markets in our modeling the independent system operator iso dispatches generation and determines nodal prices via solving an optimal power flow opf and the individual generator optimizes its submitted supply function with nash supply function equilibrium sfe strategy after taking into account iso s decision making process on dispatched generations and nodal prices the conditions for the existence of equilibrium are given and it is shown that there may be multiple equilibria or no pure nash equilibrium the equilibrium if it exists will be at a point where generators pay no congestion charge

distinguishing design flaws from misconduct a new approach to electricity market analysis the power industry is perhaps the only industry where industry wide economy heavily depends on engineering operation economic inefficiency can be a consequence of either market participants misconducts mpm or engineering operation difficulties associated with market design flaws mdf based on the characteristic of engineering operation and economic studies of strategic behavior we suggest that the independence of errors in engineering control can be used as a measure of market functioning it is also possible to distinguish the market problems of mpm and mdf by studying a matrix of correlations of engineering variables and economic indices this paper proposes a method of empirical analysis by analyzing the significance of dependence of engineering control variables an application to the ercot real time market is also presented to illustrate the method

a game theoretic analysis of wind generation variability on electricity markets wind generation variability in an energy only market such australian national electricity market nem can create significant revenue uncertainties for incumbent generators and substantially increase price risks faced by retailers this paper presents a cournot game model to formally analyze how high volatility of wind generation in a concentrated energy only market can raise the peak shoulder period of typically low wind generation prices to offset the foregone revenue during off peak periods of high wind generation a monte carlo simulation around a cournot game is formulated as an inter temporal nonlinear optimization problem to assess these issues the model is implemented for the south australian zone of the australian nem that has experienced high growth in wind generation in recent years the model results support some of the observed spot pricing behavior in the region in recent years these findings have significant ramifications for the efficacy of the energy only market in scenarios with high penetration of intermittent generation

real time pricing to assist in load frequency control we study the use of real time prices to assist in the control of frequency and tie line deviations in electric power systems the role of such prices if any would yield the practical limit to the trend in electric power systems of varying prices on ever faster time scales the application of prices in electric power systems to increase the efficient use of resources is an established technique the pricing schemes can be classified by time scales energy adjustment charges vary seasonally or monthly while time of day rates vary two or three times per day the power brokering system of 18 florida utilities operates on an hourly time scale in a spot price market of buyers and sellers of electric power prices adapt to system operation conditions such as changes in system lambda the effect of generation shortages and the effect of line overloads the fastest spot price that has been implemented to date is 30 minutes most implementations involve 1 hour time steps which may be prespecified 24 hours in advance on a five minute time scale is system lambda a shadow price used internally by electric utilities for economic dispatch a key assumption of spot pricing and economic dispatch is that the power system is in quasi steady state i e power system dynamics involving frequency voltage etc are ignored and only kirchoff s laws for network are considered the paper explores pricing at time scales where the quasi steady state assumption is no longer valid

majority rule and election models abstract this paper surveys the theoretical work that has been done on majority rule and economic models of elections section i provides an overview of the topic section 2 reviews the most important results that have been obtained about majority rule as an abstract collective choice rule section 3 identifies some alternative inferences that can be made from those results section 4 covers some models that include additional features that are present in political institutions where majority rule is used section 5 concentrates on some alternative election models and equilibrium concepts section 6 focuses on election models with abstentions and or candidate uncertainty about voter behaviour section 7 compares and contrasts models where candidates are certain about what the voters choices will be contingent upon about the choices made by the candidates and models where they are uncertain about those choices section 8 closes the survey by identifying some emerging areas of research

pareto optimality of policy proposals with probabilistic voting this paper studies the pareto optimality properties of policy proposals and electoral outcomes when there is probabilistic voting theorem 1 proves that when the position of one candidate is taken as fixed the other candidate will propose a pareto optimal alternative this implies that whenever there is an electoral equilibrium in pure strategies the electoral outcome is pareto optimal it also implies that even if there is no such equilibrium the electoral outcomes from a sequence of elections will be pareto optimal except possibly for an initial status quo

cracking the whip spatial voting with party discipline and voter polarization the spatial voting theory literature has generally focused on either parties or candidates as the unit of analysis and ignored strategic interactions between them i study a game theoretic spatial model of elections with many heterogeneous constituencies in which both party and candidate behavior are modeled parties choose a platform and a whip rate representing the proportion of final policy that will be made by the party as opposed to by the successful candidates candidates are office motivated and can choose both a platform and a level of advertising in order to defeat their opponent it is shown that the introduction of whipping as a choice variable can cause party platforms to diverge and that parties will whip on some but not all issues reflecting the empirical reality of parties influencing rather than determining policy outcomes exclusively further parties respond to sharper voter polarization by reducing the power of the whip as well as distinguishing their platforms from one another while more voter uncertainty has the opposite effect other real world phenomena including safe seats and legislators voting with their party even when unwhipped are also shown to be predicted by the model

strategic behavior and equilibrium in experimental oligopolistic electricity markets the method of experimental economics is applied to research of oligopolistic electricity markets the design of experimental platform principles of experimental economics and experimental design are introduced the experiments are organized on base of the cournot model of oligopolistic electricity markets a set of experiments are conducted on the experimental oligopolistic markets with three generating companies gencos and the experimental results are analyzed with strict statistics approaches the results show that the market competition will converge to the results between perfect competition equilibrium and nash equilibrium in oligopolistic electricity markets with asymmetric production cost functions and repeated play among the gencos the decision support tools of gencos have significant influences on experimental results the markets converge to static cournot nash equilibrium when the bounded rational subjects repeatedly play equipped with the tools that can give best response strategies the experimental method provides a complement to the theoretical research and computer simulation and has many merits in modeling realistic electricity markets

management of multiple congested conditions in unbundled operation of a power system this paper studies congestion management based on congestion pricing as may be done by an independent power system operator four main concepts are discussed congestion pricing can lead to the same solution as an optimal power flow pricing need not have cost information available good estimates of nonlinear cost coefficients are necessary and pricing for congestion management is separable from pricing for the purpose of transmission network revenue reconciliation emphasis is on the determination of sufficient information by observation of the behavior of the market to permit optimum pricing without explicit communication among parties and without generators ever being explicitly concerned about the relief of flow congestion results from simulated experiments are presented

walrasian market clearing for demand response exchange this paper presents the design and evaluation of an effective market clearing scheme for trading demand response dr in a deregulated power system the proposed scheme is called demand response exchange drx in which dr is treated as a public good to be exchanged between two groups of participating agents namely dr buyers and dr sellers while buyers require dr and are willing to pay for it sellers have the capacity to curtail customer loads to supply dr on request the drx market clearing scheme uses walrasian auctions where agents update their dr quantity bids in response to prices adjusted by the market operator this auction is repeated iteratively until market equilibrium is obtained at the point where the market outcome is proven to be pareto optimal the proposed scheme is tested on a small power system and its effectiveness substantiated

decentralized participation of flexible demand in electricity markets part i market mechanism in the deregulated power systems setting the realization of the significant demand flexibility potential should be coupled with its integration in electricity markets centralized market mechanisms raise communication computational and privacy issues while existing dynamic pricing schemes fail to realize the actual value of demand flexibility in this two part paper a novel day ahead pool market mechanism is proposed combining the solution optimality of centralized mechanisms with the decentralized demand participation structure of dynamic pricing schemes and based on lagrangian relaxation lr principles part i presents the theoretical background algorithmic approaches and suitable examples to address challenges associated with the application of the mechanism and provides an implementation framework non convexities in reschedulable demand participants price response and their impacts on the ability of the basic lr structure to reach feasible market clearing solutions are identified and a simple yet effective lr heuristic method is developed to produce both feasible and high quality solutions by limiting the concentrated shift of reschedulable demand to the same low priced time periods

computing all nash equilibria of multiplayer games in electricity markets by solving polynomial equations the analysis of the nash equilibrium ne in electricity markets with imperfect competition is subject to two major challenges the treatment of multiplayer games and the determination of the existence of multiple market equilibria to resolve these obstacles a solution method based on the payoff matrix approach and polynomial equations is proposed in this paper to calculate all the nash equilibria of multiplayer games in the electricity markets first the proposed method decomposes the game by means of a set of all pure strategies assigned with positive probabilities support for each possible support the ne condition can be characterized by a set of polynomial equations with inequality constraints next the homotopy continuation algorithm is employed to obtain all solutions of the polynomial system finally all nash equilibria can be found by verifying each solution of all polynomial systems two example systems one involving the cournot model and the other based on the supply function equilibrium sfe model are applied to test the proposed method respectively the results show that the proposed method has the ability to identify all ne under certain conditions indicating that the proposed algorithm is useful for providing insights into the theoretical analysis of electricity markets

electricity market near equilibrium under locational marginal pricing and minimum profit conditions this paper provides a tool to determine the near equilibrium of an electric energy market this market works under locational marginal pricing i e generating units and demand loads are paid and pay respectively the locational marginal prices corresponding to the nodes they are connected to the near equilibrium is defined as the energy transaction levels for which generating companies maximize their respective profits and consumption companies maximize their respective utilities an independent system operator clears the market maximizing the social welfare conditions that ensure minimum profit for generating units can be included however these conditions may render a generating unit uncompetitive and expel it from the market demands are taken to be non constant and values are determined as part of the solution the near equilibrium is obtained through the solution of a mixed integer quadratic problem equivalent to a mixed linear complementarity problem that includes the minimum profit conditions it is important to note that the near equilibrium concept presented in this paper does not solve a market equilibrium when indivisibilities such as start up costs or the like are present lastly we validate the proposed model on a case study using data from the ieee reliability test system

the economic efficiency impacts of alternatives for revenue reconciliation about a dozen electric utilities in the us offer rates that possess real time characteristics in these implementations the real time prices are updated at half hourly or hourly intervals and in no case are the prices spatially differentiated the implemented rates are based upon marginal generating costs with markups to account for system transmission and distribution costs or other revenue reconciliation needs this paper analyzes how great is the impact of alternative price markup methods on measures of social welfare and the time pattern of real time prices a case study and sensitivity results are also presented

interest groups campaign contributions and probabilistic voting this essay develops a simple model to analyze the impact of campaign contributions on electoral policy decisions of candidates for office interest groups here are firms that select contributions under the assumption that candidates policies and opposing groups donations remain unaltered candidates however recognize that their policy choices affect contributions campaign contributions are used by candidates to affect policy oriented voters perceptions of candidates positions in this framework the introduction of campaign contributions may affect candidates electoral policies and if they do then they benefit surely exactly one of the two interest groups

electricity tariffs under imperfect knowledge of participant benefits the authors consider the problem of establishing tariffs for electrical energy under uncertainty about the value of the energy to the participants a tariff update that achieves welfare maximization asymptotically through successive approximations to the ideal tariff is proposed the successive update of the tariff avoids the need for accurate a priori knowledge of electricity system demand and generation as a function of price the key results are a tariff update algorithm and a proof of local convergence two necessary steps for implementation of practical responsive pricing

benefit optimization of centralized and decentralized power systems in a multi utility environment the objective is to examine the theoretical bases for benefit optimization in centralized and decentralized electric power systems in a centralized single control power system cost revenue and profit are used as system performance criteria for benefit optimization and the conditions are compared the results show that conventional cost minimization is not necessarily equivalent to benefit optimization based on other criteria in a decentralized multi utility power system benefit optimization and its allocation are investigated at the unconstrained economic optimum economic optimum with constraints and conditions under which the solution is an economic suboptimum the data from the epri regional systems are used to show practical examples of the benefit allocation with wheeling transactions although some rules are better for society than others there still is not one right answer to determine the rules for benefit optimization

party policy and campaign costs in a multi constituency model of electoral competition in this essay a multi constituency model of electoral competition was developed under the assumption that party candidates possessed no effective autonomy such a model describes the polar extreme opposite that of the more common single constituency framework in which candidates have complete autonomy the existence of a nash equilibrium to the multi constituency election game was established under the assumption that parties maximize the expected number of winning seats or behaved as pure independents under any other reasonable election goal e g maximize probability of winning a majority of constituencies this existence breaks down the nature of any equilibrium was investigated in some detail and the influence of campaign costs both statutory and non statutory on party behaviour analysed this was found to be qualitatively important in particular differingeconomic resources between parties is sufficient to prevent convergence inpolicy space

efficient determination of cournot equilibria in electricity markets this paper analyzes the deregulated electricity market using game theory and investigates the properties of cournot equilibrium points a new algorithm for the calculation of the cournot equilibrium of an electricity market in the absence of transmission constraints is presented the algorithm is based on the transformation of the cournot game into a three level decision making scheme with economic signal exchange the algorithm is tested on a hypothetical market in order to demonstrate the effects of market concentration and demand elasticity case studies indicate that the algorithm is very efficient computationally and therefore suitable for use with multi period production scheduling models for the electricity market

decentralized multi period economic dispatch for real time flexible demand management emerging smart grid enabling technologies will allow an unprecedented degree of observability and control at all levels in a power system combined with flexible demand and storage they could allow procuring energy at minimum cost and environmental impact that however presupposes real time coordination of demand of individual households and industries down at the distribution level with generation at the transmission level this is closely related with the balancing market economic dispatch ed problem which currently does not take into account distribution network constraints and flexible demand characteristics still assuming a suitably modified form of that problem was available due to both computational and communications requirements its centralized solution in its full detail would not be tractable while there is currently a wealth of literature dealing with distributed optimization applications in power systems it typically focuses on smaller parts of the overall energy management problem e g transmission area synchronization or electric vehicles management often without considering its full scale or establishing any association with energy market mechanisms the target of this paper is twofold 1 identify a flexible demand and distribution network inclusive formulation for ed and 2 propose a solution method

multicommodity spatial cournot model for generator bidding analysis conventional behavioral models such as cournot to analyze generator behavior do not reflect many of the complexities of advanced electricity markets dispatch and pricing in a number of advanced pool based electricity markets worldwide explicitly recognize the co optimization of ancillary services as well as transmission constraints this paper discusses the development of and experiments with a multimarket cournot model that deals with co optimization of multiple commodities namely energy and various classes of ancillary services and deals with transmission constraints that separate these commodity markets spatially we also discuss the multimarket extension of the cournot model to deal with bilateral contracts for energy a nonlinear programming formulation of the proposed model and the analysis of nodal prices are presented followed by a detailed set of experiments using a simple three node system the model is expected to add to understanding of complex interactions between energy and ancillary services markets and further the impact transmission capacity limits may have on exercise of market power of each of these markets

a theory of electricity tariff design for optimal operation and investment this study addresses the problem of balancing supply and demand side operation and investment activities existing theory is extended to cover electricity industry models with uncertainty in future conditions and intertemporal linking such as storage and investment an optimal pricing structure which takes these into account is presented it would induce participants suppliers and consumers to make profit maximizing investment and operation decisions which are socially optimal the structure contains two terms a short run marginal cost pricing as well as a new incentive term to account for the interaction of participants at different time points a probabilistic forecast of pricing structures at future time is required a justification of the result and three simple illustrative examples are given

solving three player games by the matrix approach with application to an electric power market in models of imperfect competition of deregulated electricity markets the key task is to find the nash equilibrium ne the approaches for finding the ne have had two major bottlenecks computation of mixed strategy equilibrium and treatment of multiplayer games this paper proposes a payoff matrix approach that resolves these bottlenecks the proposed method can efficiently find a mixed strategy equilibrium in a multiplayer game the formulation of the ne condition for a three player game is introduced and a basic computation scheme of solving nonlinear equalities and checking inequalities is proposed in order to relieve the inevitable burden of searching the subspace of payoffs several techniques are adopted in this paper two example application problems arising from electricity markets and involving a cournot and a bertrand model respectively are investigated for verifying the proposed method the proposed method outperforms a publicly available game theory software for the application problems

reconciling social welfare agent profits and consumer payments in electricity pools under a common condition called profit suboptimality market equilibrium cannot be reached in electricity pools in other words no system marginal price exists for which the profit driven independent generators would self schedule to levels that exactly meet the demand on the other hand although a centrally imposed generation schedule satisfies power balance it may force some agents to operate at a profit below what they could achieve under self scheduling this paper examines these incompatible goals and proposes a conflict resolution scheme based on the notion of generalized uplift functions these functions are defined such that they i change the offered generation cost characteristics so as to increase the system marginal price thus forcing the consumers to compensate the generators for part of their combined loss of profit ii execute an equitable transfer of revenues among the generators so that these also participate in any loss of profit compensation iii ensure market equilibrium at the centralized minimum cost solution and iv ensure that the net sum of the uplifts adds up to zero

linear complementarity models of nash cournot competition in bilateral and poolco power markets two cournot models of imperfect competition among electricity producers are formulated as mixed linear complementarity problems lcps and a simple example is presented to illustrate their application the two models simulate bilateral markets the models include a congestion pricing scheme for transmission but other transmission pricing approaches can also be represented in this framework the two models differ from each other in that one has no arbitrage between nodes of the network while in the other model arbitragers erase any noncost based differences in price the latter bilateral model turns out to be equivalent to a cournot model of a poolco the models differ from other cournot market models in that they include both of kirchhoff s laws via a dc approximation can include arbitragers possess unique solutions and are readily solved by efficient lcp algorithms the key assumption that permits their formulation as lcps is that each producer naively assumes that its output will not affect transmission prices

an empirical study of applied game theory transmission constrained cournot behavior restructured energy markets present opportunities for the exercise of market power meaning market players can potentially maintain prices in excess of competitive prices in this paper we investigate cournot equilibrium in a simple example network we analyze three market players in a transmission constrained system and consider nonconstant marginal cost several scenarios are evaluated that show a pure strategy equilibrium can break down even when a transmission constraint exceeds the value of the unconstrained cournot equilibrium line flow

capacity and energy only markets under high renewable penetration this paper presents a multi nodal intertemporal cournot gaming model with transmission constraints and uses it to simulate energy only and capacity energy market designs in the presence of uncertainties stemming from intermittent renewable power generation both market paradigms are compared to a competitive benchmark in order to determine which one performs better in a concentrated market with significant penetration of wind and solar generation as a specific example the model is applied to the south australian zone of the australian national electricity market nem the simulation results for the time interval 2013 2030 show that the capacity energy market has the potential to induce significant new capacity and push prices much closer to the competitive level in contrast to the current energy only market design

multilevel demand subscription pricing for electric power abstract this paper investigates a general demand subscription pricing policy for electric power service ie a menu of service contracts for assigning different interruption probabilities and prices to different load levels this interruptibility feature is combined with a nonlinear energy price schedule to encourage load flattening we derive a customer value model and a weighted sum objective function for the supplier and consumers for selecting optimal price structures of this type the general form of the optimal price policy is derived and discussed and the implementation methodology is outlined an illustrative example is solved in detail