The role of a market maker in networked cournot competition

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

doi:10.1109/CDC.2014.7040088

The role of a market maker in networked cournot competition

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

Research output: Chapter in Book/Report/Conference proceeding › Conference contribution

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 language	English (US)
Title of host publication	53rd IEEE Conference on Decision and Control,CDC 2014
Publisher	Institute of Electrical and Electronics Engineers Inc.
Pages	4479-4484
Number of pages	6
Edition	February
ISBN (Electronic)	9781479977468
DOIs	https://doi.org/10.1109/CDC.2014.7040088
State	Published - 2014
Externally published	Yes
Event	2014 53rd IEEE Annual Conference on Decision and Control, CDC 2014 - Los Angeles, United States Duration: Dec 15 2014 → Dec 17 2014

Publication series

Name	Proceedings of the IEEE Conference on Decision and Control
Number	February
Volume	2015-February
ISSN (Print)	0743-1546
ISSN (Electronic)	2576-2370

Other

Other	2014 53rd IEEE Annual Conference on Decision and Control, CDC 2014
Country/Territory	United States
City	Los Angeles
Period	12/15/14 → 12/17/14

ASJC Scopus subject areas

Control and Systems Engineering
Modeling and Simulation
Control and Optimization

Online availability

10.1109/CDC.2014.7040088

Library availability

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Cite this

Bose, S., Cai, D. W. H., Low, S., & Wierman, A. (2014). The role of a market maker in networked cournot competition. In 53rd IEEE Conference on Decision and Control,CDC 2014 (February ed., pp. 4479-4484). Article 7040088 (Proceedings of the IEEE Conference on Decision and Control; Vol. 2015-February, No. February). Institute of Electrical and Electronics Engineers Inc.. https://doi.org/10.1109/CDC.2014.7040088

The role of a market maker in networked cournot competition. / Bose, Subhonmesh; Cai, Desmond W.H.; Low, Steven et al.
53rd IEEE Conference on Decision and Control,CDC 2014. February. ed. Institute of Electrical and Electronics Engineers Inc., 2014. p. 4479-4484 7040088 (Proceedings of the IEEE Conference on Decision and Control; Vol. 2015-February, No. February).

Research output: Chapter in Book/Report/Conference proceeding › Conference contribution

Bose, S, Cai, DWH, Low, S & Wierman, A 2014, The role of a market maker in networked cournot competition. in 53rd IEEE Conference on Decision and Control,CDC 2014. February edn, 7040088, Proceedings of the IEEE Conference on Decision and Control, no. February, vol. 2015-February, Institute of Electrical and Electronics Engineers Inc., pp. 4479-4484, 2014 53rd IEEE Annual Conference on Decision and Control, CDC 2014, Los Angeles, United States, 12/15/14. https://doi.org/10.1109/CDC.2014.7040088

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The role of a market maker in networked cournot competition

Abstract

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