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: | Bunn Derek W., Oliveira Fernando S. |
Keywords: | game theory |
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.