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Probabilistic game approaches for network cost allocation


  • bhakar, Rohit
  • sriram, V.s.
  • padhy, Narayana prasad
  • gupta, Hari om


In a restructured power market, the network cost is to be allocated between multiple players utilizing the system in varying capacities. Cooperative game approaches based on Shapley value and Nucleolus provide stable models for embedded cost allocation of power networks. Varying network usage necessitates the introduction of probabilistic approaches to cooperative games. This paper proposes a variety of probabilistic cooperative game approaches. These have variably been modeled based upon the probability of existence of players, the probability of existence of coalitions, and the probability of players joining a particular coalition along with their joining in a particular sequence. Application of these approaches to power networks reflects the system usage in a more justified way. Consistent and stable results qualify the application of probabilistic cooperative game approaches for cost allocation of power networks.

Suggested Citation

  • bhakar, Rohit & sriram, V.s. & padhy, Narayana prasad & gupta, Hari om, 2010. "Probabilistic game approaches for network cost allocation," MPRA Paper 29003, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:29003

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    References listed on IDEAS

    1. Parrachino, Irene & Dinar, Ariel & Patrone, Fioravante, 2006. "Cooperative game theory and its application to natural, environmental, and water resource issues : 3. application to water resources," Policy Research Working Paper Series 4074, The World Bank.
    2. Robert J. Weber, 1977. "Probabilistic Values for Games," Cowles Foundation Discussion Papers 471R, Cowles Foundation for Research in Economics, Yale University.
    3. Young, H.P., 1994. "Cost allocation," Handbook of Game Theory with Economic Applications,in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 2, chapter 34, pages 1193-1235 Elsevier.
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    Cited by:

    1. Stoilov, Dimo & Stoilov, Luben, 2013. "Improving inter-transmission compensation in EU," Energy Policy, Elsevier, vol. 62(C), pages 282-291.
    2. Rahmani-Dabbagh, Saeed & Sheikh-El-Eslami, Mohammad Kazem, 2016. "A profit sharing scheme for distributed energy resources integrated into a virtual power plant," Applied Energy, Elsevier, vol. 184(C), pages 313-328.
    3. M. Fiestras-Janeiro & Ignacio García-Jurado & Manuel Mosquera, 2011. "Cooperative games and cost allocation problems," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 19(1), pages 1-22, July.

    More about this item


    Cooperative games; embedded cost allocation; probabilistic games; transmission pricing;

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory


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