Equilibrium Analysis for a Network Market Model

Abstract

In this paper we model and analyze a market equilibrium structure working on a network. The model is motivated by competition in electricity power generation markets, where consumers and producers are located in different nodes connected by power transmission lines. We analyze two different equilibrium concepts, namely, the Walrasian and the noncooperative Nash outcomes. By using concepts coming from Variational Analysis and Game Theory, we prove that both equilibria exist. Our existence proofs rely on fixed point theorems and epiconvergence stable approximations.