Simulation and Analysis of Dynamic Evolution of Electricity Market Based on Bidding Decisions with Heterogeneous Expectations

Based on different bidding decisions with heterogeneous expectations of market participants, a dynamic model of electricity market considering power network constraints is proposed. This model is represented by a discrete difference equations embedded with the optimization problem of market clearing. By using the nonlinear complementarity function, the complex dynamic behaviors of electricity market are simulated and analyzed. The Nash equilibrium and its stability, the periodic and even chaotic dynamic behaviors beyond the stability region of Nash equilibrium are investigated.