The evolutionary game analysis of bidding for Chinese power enterprises

In order to analyze and determine the parameters which influence the pricing strategy of the power company in China, evolutionary game theory and Hawk and Dove game model are used. Given the two types of enterprises in Chinese power market, the large-scale enterprises and the small-scale enterprises, based on the replicator dynamic equations of the pricing strategies of the two types of enterprises and Jacobian Matrix analysis, the evolution equilibrium solutions to pricing for the two types of enterprises are obtained. By changing the values of the parameters in the pricing strategies, their influences on the competitive evolution strategies are explicated. The results show that the bidding evolution process depends on the success probability (r) of the competitive bidding between the two types of enterprises and depends on the difference (f) between the mark-up and the basic bidding. And the other conclusion is that some parameters are difficult to be adjusted by market mechanism. Government intervention on deciding the parameter values is helpful for the health and stability of Chinese power market.