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Dynamic Testing of Wholesale Power Market Designs: An Open-Source Agent-Based Framework

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  • Junjie Sun

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  • Leigh Tesfatsion

    ()

Abstract

In April 2003 the U.S. Federal Energy Regulatory Commission proposed a complicated market design—the Wholesale Power Market Platform (WPMP)—for common adoption by all US wholesale power markets. Versions of the WPMP have been implemented in New England, New York, the mid-Atlantic states, the Midwest, the Southwest, and California. Strong opposition to the WPMP persists among some industry stakeholders, however, due largely to a perceived lack of adequate performance testing. This study reports on the model development and open-source implementation (in Java) of a computational wholesale power market organized in accordance with core WPMP features and operating over a realistically rendered transmission grid. The traders within this market model are strategic profit-seeking agents whose learning behaviors are based on data from human-subject experiments. Our key experimental focus is the complex interplay among structural conditions, market protocols, and learning behaviors in relation to short-term and longer-term market performance. Findings for a dynamic 5-node transmission grid test case are presented for concrete illustration.
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Suggested Citation

  • Junjie Sun & Leigh Tesfatsion, 2007. "Dynamic Testing of Wholesale Power Market Designs: An Open-Source Agent-Based Framework," Computational Economics, Springer;Society for Computational Economics, vol. 30(3), pages 291-327, October.
  • Handle: RePEc:kap:compec:v:30:y:2007:i:3:p:291-327
    DOI: 10.1007/s10614-007-9095-1
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    References listed on IDEAS

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    More about this item

    Keywords

    Wholesale power market restructuring; Empirical input validation; Market design; Behavioral economics; Learning; Market power; Agent-based modeling; AMES wholesale power market framework; Java; RepastJ; L1; D8; L9; C6;
    All these keywords.

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • L9 - Industrial Organization - - Industry Studies: Transportation and Utilities
    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling

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