Application of game theory in power quality market

Licensure of emission and charging for electromagnetic pollution are the primary means to manage electromagnetic environment and ensure social equity. Emission right (ER) can be traded freely. ER trading, as an effective means to optimize and distribute resources, is the most common and important item in power quality market (PQM). The key to constitute relevant ER trade rules is how to make rational issue of initial ER to each electromagnetic pollution source, which will have decisive impact on the tendency of power quality (PQ) investment. Game theory searches decisions when players´ action directly influences each other. It keeps the equilibrium of these decisions as well. The ER gross calculation, the initial distribution and the trade of ER can be described as different game processes respectively using the theory, which ensures the study of market policy and market players´ action accords with actual cases. This paper analyzes and works out the ER gross using incomplete static cooperative game theory, and also proposes the Bayes Nash equilibrium for the optimized distribution of initial ER and high-quality electric energy among market players through uniform-price sealed auction model.