CAS-based analysis of the evolutionary electricity market

This paper probes into the essential problem in electricity markets based on the CAS automata network modeling method and evolutionary game theory. We found that in a complex electricity market, it is impossible to meet the requirements of full rationality for the economic entities. So the concept of bounded rationality is put forward. Only with a reasonable learning mechanism can the entities of bounded rationality reach equilibrium through constant adjustment and improvement to their strategies. According to the CAS-based automata network modeling method, we established an evolutionary model of the electricity market and designed a gradual Cournot adjustment mode. At last, we simulate the Cournot adjustment in combination with typical cases to reveal those possible causes leading to instability of electricity markets. Although the model in this paper is established only for the unilateral open electricity market, from the standpoint of methodology, it can be generalized and will provide practical guidance for all kinds of electricity markets.