Analysis of dynamic Cournot learning models for generation companies based on conjectural variations and forward expectation

Electricity spot markets generally operate on an hourly basis; under this condition GENCOs can closely observe their competitors’ market behavior. For this purposes, a detailed dynamic model is one of the tools used by GENCOs to understand the behavioral variations of competitors over time. The required abilities to rapidly adjust one's own decision-making create a need for new learning procedures and models. Conjectural variations (CV) have been proposed as a learning approach. In this paper a model based on forward expectations (FE) is proposed as a learning approach, and through illustrative examples it is shown that the market equilibria found by the CV model are also obtained by the FE model.