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Abstract
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Optimal generation companies’ participation in different
electricity markets can be modeled as a competitive
game. Each company tries to behave optimally considering other
players’ actions, in the game. Generally, the player’s profit
is formulated based on expected utility method with objective
behavior completely. However, the subjectivity of players causes
the differences between expected and real actions. This paper
proposes a game of generation companies’ participation in
adjusting the optimal bidding strategies for the day ahead energy
market. Moreover, the subjectivity of players and how it affects
their strategy determination have been modeled by applying the
prospect theory on the game. In addition, this paper presents
the full formulation of mixed strategy non-cooperative game
of generation companies in both conditions of objective and
subjective behavior of players. Finally, simulation results have
been provided to show how subjectivity causes players’ avoidance
from the strategies expected to have higher losses than others.
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