Prosumers Participation in Markets: A Scalar-Parameterized Function Bidding Approach
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arXiv
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| Main Authors: | , , , |
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| Format: | Preprint |
| Published: |
2023
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| _version_ | 1866909137135206400 |
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| author | Alawad, Abdullah Zaman, Muhammad Aneeq uz Alshehri, Khaled Başar, Tamer |
| author_facet | Alawad, Abdullah Zaman, Muhammad Aneeq uz Alshehri, Khaled Başar, Tamer |
| contents | In uniform-price markets, suppliers compete to supply a resource to consumers, resulting in a single market price determined by their competition. For sufficient flexibility, producers and consumers prefer to commit to a function as their strategies, indicating their preferred quantity at any given market price. Producers and consumers may wish to act as both, i.e., prosumers. In this paper, we examine the behavior of profit-maximizing prosumers in a uniform-price market for resource allocation with the objective of maximizing the social welfare. We propose a scalar-parameterized function bidding mechanism for the prosumers, in which we establish the existence and uniqueness of Nash equilibrium. Furthermore, we provide an efficient way to compute the Nash equilibrium through the computation of the market allocation at the Nash equilibrium. Finally, we present a case study to illustrate the welfare loss under different variations of market parameters, such as the market's supply capacity and inelastic demand. |
| format | Preprint |
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arxiv_https___arxiv_org_abs_2309_15423 |
| institution | arXiv |
| publishDate | 2023 |
| record_format | arxiv |
| spellingShingle | Prosumers Participation in Markets: A Scalar-Parameterized Function Bidding Approach Alawad, Abdullah Zaman, Muhammad Aneeq uz Alshehri, Khaled Başar, Tamer Computer Science and Game Theory Systems and Control In uniform-price markets, suppliers compete to supply a resource to consumers, resulting in a single market price determined by their competition. For sufficient flexibility, producers and consumers prefer to commit to a function as their strategies, indicating their preferred quantity at any given market price. Producers and consumers may wish to act as both, i.e., prosumers. In this paper, we examine the behavior of profit-maximizing prosumers in a uniform-price market for resource allocation with the objective of maximizing the social welfare. We propose a scalar-parameterized function bidding mechanism for the prosumers, in which we establish the existence and uniqueness of Nash equilibrium. Furthermore, we provide an efficient way to compute the Nash equilibrium through the computation of the market allocation at the Nash equilibrium. Finally, we present a case study to illustrate the welfare loss under different variations of market parameters, such as the market's supply capacity and inelastic demand. |
| title | Prosumers Participation in Markets: A Scalar-Parameterized Function Bidding Approach |
| topic | Computer Science and Game Theory Systems and Control |
| url | https://arxiv.org/abs/2309.15423 |