Comparison and empirical validaton of optimizing and agent-based models of the Italian electricity market

Eric Guerci and Sandro Sapio ()

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Abstract: In recent years, several oligopolistic models of the liberalized power exchanges have been proposed, within two paradigms based upon radically different assumptions on rationality, learning and cognition: optimal choice and agent-based computational modeling. This paper is a first attempt to compare the explanatory performances of an agent-based model with a supply function equilibrium model on the same dataset. The models are designed in such a way that differences in performance between them are mainly due to their different behavioral assumptions, and are validated on a unique plant-level dataset on the Italian power exchange. As suggested by our findings, the agent-based model is better able to capture the intraday profile of power prices, but both models tend to overestimate the degree of competition among generating companies.

Keywords: Supply Function Equilirbium; Electricity markets; Agent-based (search for similar items in EconPapers)
Date: 2011-05-25
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Citations: View citations in EconPapers (11)

Published in Energy Market (EEM), 2011 8th International Conference on the European, May 2011, Zagreb, Croatia. pp.849-856, ⟨10.1109/EEM.2011.5953128⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00871126

DOI: 10.1109/EEM.2011.5953128

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