Evolutionary representation of energy markets and systems

This paper presents the application of a new branch of the economical theory - evolutionary games and bounded rationality - to energy markets under development. The model is able to correctly represent 1) all traditional physical system characteristics, 2) agent´s behavior, including bounded rationality, lack of information, learning capability, etc. 3) market´s dynamics and evolution, including responses to players´ actions, regulatory changes, consumers´ reactions, etc. A case study with a realistic market illustrates the proposed model. More than just an equilibrium solution, the proposed model is able to completely describe the process that led to this point, including agent´s learning dynamics (with successes and failures), market responses, etc.