Evaluating individual market power in electricity markets via agent-based simulation

Evaluating individual market power in electricity markets via agent-based simulation

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Article ID: iaor20033179
Country: Netherlands
Volume: 121
Issue: 1
Start Page Number: 57
End Page Number: 77
Publication Date: Jul 2003
Journal: Annals of Operations Research
Authors: ,
Keywords: game theory
Abstract:

We use agent-based simulation in a coordination game to analyse the possibility of market power abuse in a competitive electricity market. The context of this was a real application to the England and Wales electricity market as part of a Competition Commission Inquiry into whether two particular generators could profitably influence wholesale prices. The research contributions of this paper are both in the areas of market power and market design policy issues for electricity markets, and in the methodological use of large industry-wide evolutionary simulation models.

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