Generation companies decision-making modeling by linear control theory

This paper proposes four decision-making procedures to be employed by electric generating companies as part of their bidding strategies when competing in an ologopolistic market: naïve, forward, adaptive, and moving average expectations. Decision-making is formulated in a dynamic framework by using linear control theory. The results reveal that interactions among all GENCOs affect market dynamics. Several numerical examples are reported, and conclusions are presented.