The application of asymmetric game in the electrical power market

Abstract

This paper introduces the importance of the real-world relevant issues of the electrical power market regarding 2 × 2 strategic games, which have pointed out the optimization of the facing problems concerning game theoretical approach. Based on 2×2 game, the electrical power market presuming two players named power generator (PG) X and Y with two strategies; higher and lower production, show the possible strategies of game theoretical approach relying on the payoff matrix related to the different game classes; Prisoner's Dilemma (PD), trivial, Chicken (CH), and Stag-hunt (SH). The negotiations for choosing the best strategies can be determined by the Prisoner's Dilemma (PD), and Stag-hunt (SH) that hinge on the demand of the situation. The Trivial game would prefer for agreement whereas Chicken (CH) game can be played in terms of risks associated situation by the game players along with different related power issues to achieve for individual benefit. Another possible solution to adopt the best strategies would be either Nash equilibrium or Maxi-min strategy (or sometimes both) which indicate the better suggestion for the market power issues.