ABSTRACT
One may wonder what the outcome may be after an electricity market “goes live”— for example, the degree of market power, the trend of electricity prices, and other factors. In this chapter, we first use a microeconomic method known as game theory to analyze these factors. Game theoretic models for studying electricity market behaviors are built to analyze equilibrium and market power. We also analyze the results of two auction experiments in which graduate students participated. We can see the small difference between theoretical analysis and experiment results. This indicates that building an experimental system to analyze complex electricity market problems can be meaningful.
