On the efficiency of networked Stackelberg competition

Yunjian Xu, Desmond Cai, Subhonmesh Bose, Adam Wierman

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract

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.

Original languageEnglish (US)
Title of host publication2017 51st Annual Conference on Information Sciences and Systems, CISS 2017
PublisherInstitute of Electrical and Electronics Engineers Inc.
ISBN (Electronic)9781509047802
DOIs
StatePublished - May 10 2017
Event51st Annual Conference on Information Sciences and Systems, CISS 2017 - Baltimore, United States
Duration: Mar 22 2017Mar 24 2017

Publication series

Name2017 51st Annual Conference on Information Sciences and Systems, CISS 2017

Other

Other51st Annual Conference on Information Sciences and Systems, CISS 2017
CountryUnited States
CityBaltimore
Period3/22/173/24/17

ASJC Scopus subject areas

  • Signal Processing
  • Information Systems and Management
  • Computer Networks and Communications
  • Information Systems

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  • Cite this

    Xu, Y., Cai, D., Bose, S., & Wierman, A. (2017). On the efficiency of networked Stackelberg competition. In 2017 51st Annual Conference on Information Sciences and Systems, CISS 2017 [7926159] (2017 51st Annual Conference on Information Sciences and Systems, CISS 2017). Institute of Electrical and Electronics Engineers Inc.. https://doi.org/10.1109/CISS.2017.7926159