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Raiffa-Kalai-Smorodinsky Bargaining Solution for Bilateral Contracts in Electricity Markets

Garcia, Reinaldo Crispiniano and Contreras, Javier and Barbosa, Matheus de Lima and Toledo, Felipe Silva and da Cunha, Paulo Vinicius Aires (2020) Raiffa-Kalai-Smorodinsky Bargaining Solution for Bilateral Contracts in Electricity Markets. Energies, 13 (9). p. 2397. ISSN 1996-1073

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In electricity markets, bilateral contracts (BC) are used to hedge against price volatility in the spot market. Pricing these contracts requires scheduling from either the buyer or the seller aiming to achieve the highest profit possible. Since this problem includes different players, a Generation Company (GC) and an Electricity Supplier Company (ESC) are considered. The approaches to solve this problem include the Nash Bargaining Solution (NBS) equilibrium and the Raiffa–Kalai–Smorodinsky (RKS) bargaining solution. The innovation of this work is the implementation of an algorithm based on the RKS equilibrium to find a compromise strategy when determining the concessions to be made by the parties. The results are promising and show that the RKS approach can obtain better results compared to the Nash equilibrium method applied to a case study.


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Item Type: Article
Status: Published
CreatorsEmailPitt UsernameORCID
Garcia, Reinaldo Crispiniano0000-0002-4376-4292
Contreras, Javier
Barbosa, Matheus de Limamlbarbosa@pitt.edumlbarbosa0000-0003-4243-5670
Toledo, Felipe Silva0000-0001-6959-2065
da Cunha, Paulo Vinicius Aires
Date: 11 May 2020
Date Type: Publication
Journal or Publication Title: Energies
Volume: 13
Number: 9
Publisher: MDPI AG
Page Range: p. 2397
DOI or Unique Handle: 10.3390/en13092397
Schools and Programs: School of Computing and Information > Computer Science
Refereed: Yes
Uncontrolled Keywords: electricity market, bilateral contracts, Raiffa–Kalai–Smorodinsky bargaining solution, game theory
ISSN: 1996-1073
Official URL:
Funders: Ministry of Science, Innovation, Universities of Spain
Article Type: Research Article
Date Deposited: 30 Nov 2021 14:14
Last Modified: 30 Nov 2021 14:14


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