Arbeitspapier

Competition and cooperation in a PFF game theoretic model of electrical energy trade

A cooperative game theoretic framework is introduced to study the behavior of cooperating and competing electrical energy providers considering price-preference rational consumers. We analyze the interactions of generators in an idealized environment described by a DC load flow model where the network is lossless and is operated by an independent regulator who ensures network stability and fulfillment of consumption needs while taking into account the preferences of consumers over generators. We assume an iterative process in which the generators publish their price offers simultaneously in each step, based on which the consumers preferences are determined. The model deals with network congestion and safety as not every generator-consumer matching is allowed to ensure the fault tolerant operation of the transmission system. To make the model as simple as possible we do not deal with transmission fees, the profit of the generators is determined as the difference between their income, and their production cost which is assumed to be linearly decreasing with the produced quantity. Any non-monopolistic proper subset of the generators may cooperate and harmonize their offered prices to increase their resulting profit. Since we allow the redistribution of profits among cooperating generators, a transferable utility game theoretic framework is used. Furthermore, as cooperation affects the outsiders as well, the resulting game is defined in partition function form. The model is able to demonstrate some interesting benefits of cooperation as well as the effect of market regulations and asymmetric information on the resulting profits and total social cost.

ISBN
978-615-5243-62-2
Language
Englisch

Bibliographic citation
Series: IEHAS Discussion Papers ; No. MT-DP - 2013/10

Classification
Wirtschaft
Cooperative Games
Transactional Relationships; Contracts and Reputation; Networks
Electric Utilities
Subject
partition function form games
electrical energy transmission networks
Stromnetz
Elektrizitätswirtschaft
Kooperatives Spiel
Wettbewerb
Unternehmenskooperation
Koalition
Asymmetrische Information
Regulierung

Event
Geistige Schöpfung
(who)
Csercsik, Dávid
Event
Veröffentlichung
(who)
Hungarian Academy of Sciences, Institute of Economics, Centre for Economic and Regional Studies
(where)
Budapest
(when)
2013

Handle
Last update
10.03.2025, 11:43 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Csercsik, Dávid
  • Hungarian Academy of Sciences, Institute of Economics, Centre for Economic and Regional Studies

Time of origin

  • 2013

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