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The roubstness of agent-based models of electricity wholesale markets

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  • Newberry, D.

Abstract

Agent-based modelling is an attractive way of finding equilibria in complex problems involving strategic behaviour, particularly in electricity markets with transmission constraints. However, while it may be possible to demonstrate convergence of learning behaviour to a Nash equilibrium, that is not sufficient to establish that the equilibrium is robust against more sophisticated strategy choices. This note examines two particular forms of agent-based modelling used in electricity market models, both variants of mark-up pricing, and demonstrates that they are robust against other strategies.Keywords: Electric utilities, industrial policy, political economy

Suggested Citation

  • Newberry, D., 2012. "The roubstness of agent-based models of electricity wholesale markets," Cambridge Working Papers in Economics 1228, Faculty of Economics, University of Cambridge.
    • Handle: RePEc:cam:camdae:1228
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    References listed on IDEAS

    as
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    5. Weidlich, Anke & Veit, Daniel, 2008. "A critical survey of agent-based wholesale electricity market models," Energy Economics, Elsevier, vol. 30(4), pages 1728-1759, July.
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    7. Derek W. Bunn and Fernando Oliveira, 2001. "An Application of Agent-based Simulation to the New Electricity Trading Arrangements of England and Wales," Computing in Economics and Finance 2001 93, Society for Computational Economics.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    agent-based modelling; electricity markets; mark-up equilibria; stability; oligopoly; learning;
    All these keywords.

    JEL classification:

    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

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