Bilateral transaction bargaining between independent utilities using a minimax-regret bargaining strategy

摘要

A new approach to bilateral power transaction bargaining problem between two independent utilities in a deregulated electricity market is proposed. The power transaction problem is considered as noncooperative bargaining under incomplete information, i.e., each utility (the seller and the buyer) knows its own operating costs but does not know its opponent's operating costs. Each participant develops its own bargaining strategy based on estimates of the opponent's operating costs. In this work, it is assumed that each participant utilizes the minimax-regret bargaining strategy to minimize his maximum regret. Here, regret is defined as the difference between the profit the participant could have made with the wisdom of hindsight and the profit he actually made. Two bargaining models are developed and examples are employed for demonstration.