Solving Discretely-Constrained Nash–Cournot Games with an Application to Power Markets

This paper provides a methodology to solve Nash–Cournot energy production games allowing some variables to be discrete. Normally, these games can be stated as mixed complementarity problems but only permit continuous variables in order to make use of each producer’s Karush–Kuhn–Tucker conditions. Th...

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Bibliographic Details
Published in:Networks and spatial economics 2013-09, Vol.13 (3), p.307-326
Main Authors: Gabriel, Steven A., Siddiqui, Sauleh Ahmad, Conejo, Antonio J., Ruiz, Carlos
Format: Article
Language:English
Subjects:
Civil Engineering
Economic models
Economic statistics
Economic theory
Economics
Economics and Finance
Electric power
Energy economics
Game theory
Games
Infrastructure
Markets
Mathematical models
Methodology
Networks
Operations Research/Decision Theory
Regional/Spatial Science
Studies
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Summary:This paper provides a methodology to solve Nash–Cournot energy production games allowing some variables to be discrete. Normally, these games can be stated as mixed complementarity problems but only permit continuous variables in order to make use of each producer’s Karush–Kuhn–Tucker conditions. The proposed approach allows for more realistic modeling and a compromise between integrality and complementarity to avoid infeasible situations.
ISSN:1566-113X
1572-9427
DOI:10.1007/s11067-012-9182-2