Strategic bids in liberalized markets

Abstract

This paper presents results of a study concerning the generation strategic bids for a single hour. In this study we incorporated the price and quantity bids. We considered an elastic demand curve, approximated by an affine function, assuming that there is consumer's reaction and that the market price and the demand are related. Also, we consider the competitors reaction using a parameter that represents the conjectural variation. We studied the market behaviour assuming that the market price is represented by a normal probability function. We studied and compared the market behaviour for two price markets types: the MCP (Market Clearing Pay) and PAB (Pay As Bid).