| Title |
Leader-Follower Model Analysis on Mixed Strategy Nash Equilibrium of Electricity Market with Transmission Congestion |
| DOI |
https://doi.org/10.5370/KIEE.2012.61.2.187 |
| Keywords |
Nash equilibrium ; Mixed strategy ; Cournot model ; Leader-follower ; Transmission congestion ; Social welfare ; Electricity market |
| Abstract |
Nash Equilibrium (NE) is as useful tool for investigating a participant's strategic generation quantity in a competitive electricity market. Cournot model may give a mixed strategy NE instead of a pure strategy when transmission constraints are considered. A mixed strategy is difficult to compute, complicated to understand conceptually, and hard to implement in an electricity market practically. This paper presents that a mixed strategy does not appear in Stackelberg leader-follower model even under a transmission congestion. A solution method is proposed for the leader-follower model under a nondifferentiable space of a strategy variable. Based on the pure strategy NE with a transmission line congested, the merit of leader-follower model is shown from a social welfare point of view. |