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Rational Actors in Balancing Markets: a Game-Theoretic Model and Results

Rupp, Thomas (2006):
Rational Actors in Balancing Markets: a Game-Theoretic Model and Results.
Darmstadt, In: Darmstadt Discussion Papers in Economics, [Online-Edition: http://econstor.eu/bitstream/10419/32077/1/516777475.PDF],
[Report]

Abstract

Guided by game theory we develop a model to explain behavioral equilibria under uncertainty and interaction with the spot market on balancing markets. We offer some insights for the general model and derive explicit solutions for a specific model in which the error distributions and pricing function are given. The most interesting conclusions are the unique existence of an equilibrium and that no participant acts contrary to the aggregate market (either all market participants buy or sell power) and all strategies are, normalized properly, equal (which is rather counterintuitive). Furthermore the aggregate behavior is a stochastic process varying around its own variance.

Item Type: Report
Erschienen: 2006
Creators: Rupp, Thomas
Title: Rational Actors in Balancing Markets: a Game-Theoretic Model and Results
Language: English
Abstract:

Guided by game theory we develop a model to explain behavioral equilibria under uncertainty and interaction with the spot market on balancing markets. We offer some insights for the general model and derive explicit solutions for a specific model in which the error distributions and pricing function are given. The most interesting conclusions are the unique existence of an equilibrium and that no participant acts contrary to the aggregate market (either all market participants buy or sell power) and all strategies are, normalized properly, equal (which is rather counterintuitive). Furthermore the aggregate behavior is a stochastic process varying around its own variance.

Series Name: Darmstadt Discussion Papers in Economics
Volume: 171
Place of Publication: Darmstadt
Uncontrolled Keywords: game theory, nash equilibrium, regulated energy market, balancing power
Divisions: 01 Department of Law and Economics
01 Department of Law and Economics > Volkswirtschaftliche Fachgebiete
Date Deposited: 14 Oct 2009 13:20
Official URL: http://econstor.eu/bitstream/10419/32077/1/516777475.PDF
Additional Information:

JEL classification: C73, D58, Q41, D40

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