Experimental Economics-based Electricity Market Auction Model And Bidding Strategies,

The power industry worldwide is experiencing unprecedented restructuring for breaking traditional monopoly, introducing competition and establishing electricity markets. With the fast development of electricity markets, establishing a reasonable pricing system become more and more important to keep markets well running. Especially after the failure of California electricity market and the well run of NETA, more and more researcher have concentrated on the compare between MCP and PAB.How to estimate the actions of its adversaries, how to take reasonable bidding strategies to gain more profits have be the most interest thing for generation company.First, this paper introduces the background of restructuring of the power industry and the bidding model regulation and building strategies for generation companies from several aspects.Then the experimental economics and its research method is introduced and used. Through simulation we make comparison between the two pricing formats and get a conclusion that PAB model can not yield reductions in wholesale electricity prices which is determined by the status of market competition.Then the process of making optimal bidding strategy is introduced by using an example. In another bidding experiment, we find out experimenters' risk preferences through psycho test, and then we compare these data with bidding data gathered in the experiment. We find the risk preference and the price adjustment have some relation and it's worth studying further.Finally, several conclusions are made based on the research outcomes, and several aspects should to be studied in the future.