TY - GEN
T1 - On the efficiency of networked Stackelberg competition
AU - Xu, Yunjian
AU - Cai, Desmond
AU - Bose, Subhonmesh
AU - Wierman, Adam
N1 - Publisher Copyright:
© 2017 IEEE.
PY - 2017/5/10
Y1 - 2017/5/10
N2 - We study the impact of strategic anticipative behavior in networked markets. We focus on the case of electricity markets and model the market as a game between a system operator (market maker) and generators at different nodes of the network. Generators submit quantity bids and the system operator balances demand and supply over the network subject to transmission constraints. We compare the efficiency of a networked Stackelberg equilibrium, where generators anticipate the market clearing actions of the market maker, with a networked Cournot equilibrium, where they do not. We show that networked Cournot equilibria always exists but its efficiency loss is unbounded in the worst case. In contrast, networked Stackelberg equilibria do not always exist, but in certain settings where they do exist, the efficiency loss may be bounded above by a constant.
AB - We study the impact of strategic anticipative behavior in networked markets. We focus on the case of electricity markets and model the market as a game between a system operator (market maker) and generators at different nodes of the network. Generators submit quantity bids and the system operator balances demand and supply over the network subject to transmission constraints. We compare the efficiency of a networked Stackelberg equilibrium, where generators anticipate the market clearing actions of the market maker, with a networked Cournot equilibrium, where they do not. We show that networked Cournot equilibria always exists but its efficiency loss is unbounded in the worst case. In contrast, networked Stackelberg equilibria do not always exist, but in certain settings where they do exist, the efficiency loss may be bounded above by a constant.
UR - http://www.scopus.com/inward/record.url?scp=85020167645&partnerID=8YFLogxK
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U2 - 10.1109/CISS.2017.7926159
DO - 10.1109/CISS.2017.7926159
M3 - Conference contribution
AN - SCOPUS:85020167645
T3 - 2017 51st Annual Conference on Information Sciences and Systems, CISS 2017
BT - 2017 51st Annual Conference on Information Sciences and Systems, CISS 2017
PB - Institute of Electrical and Electronics Engineers Inc.
T2 - 51st Annual Conference on Information Sciences and Systems, CISS 2017
Y2 - 22 March 2017 through 24 March 2017
ER -