The role of a market maker in networked cournot competition

Subhonmesh Bose, Desmond W.H. Cai, Steven Low, Adam Wierman

Research output: Contribution to journalConference articlepeer-review

Abstract

We study the role of a market maker (or market operator) in a transmission constrained electricity market. We model the market as a one-shot networked Cournot competition where generators supply quantity bids and load serving entities provide downward sloping inverse demand functions. This mimics the operation of a spot market in a deregulated market structure. In this paper, we focus on possible mechanisms employed by the market maker to balance demand and supply. In particular, we consider three candidate objective functions that the market maker optimizes - social welfare, residual social welfare, and consumer surplus. We characterize the existence of Generalized Nash Equilibrium (GNE) in this setting and demonstrate that market outcomes at equilibrium can be very different under the candidate objective functions.

Original languageEnglish (US)
Article number7040088
Pages (from-to)4479-4484
Number of pages6
JournalProceedings of the IEEE Conference on Decision and Control
Volume2015-February
Issue numberFebruary
DOIs
StatePublished - 2014
Externally publishedYes
Event2014 53rd IEEE Annual Conference on Decision and Control, CDC 2014 - Los Angeles, United States
Duration: Dec 15 2014Dec 17 2014

ASJC Scopus subject areas

  • Control and Systems Engineering
  • Modeling and Simulation
  • Control and Optimization

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