Dynamics of electricity market with bounded rationality Cournot game considering transmission constraints

In order to accurately model the game behaviors of market participants with bounded rationality in electricity market environment, this paper proposes the dynamic Cournot game model with bounded rationality considering transmission constraints. With this model, the Nash equilibrium and its stability of duopoly game are qualitatively analyzed, indicating that in electricity market there are different Nash equilibriums in different market parameters and operational conditions of transmission network, i.e., congestion and non-congestion, and even in some cases there is not Nash equilibrium at all. Then, the effect of some market parameters is discussed on the stability of electricity market. Based on the duopoly game model, the market dynamic behaviors are numerically simulated, in which the periodic or chaotic behaviors are focused when the market parameters are out of the stability region of Nash equilibrium