Study on the Modeling of Power Market Based on Conjectured Supply Function Equilibrium

This paper introduced the conjectured supply function equilibrium based model in order to construct the company´s strategy model under the incomplete information. It can be used to apply in the market with inelastic electricity demand and it is more suitable to evaluate potential market power existed in real electricity market. On the basis of supply function equilibrium theory, it gives out the optimized supply function of the company. In this paper we used the econometrics models and methods to analyse the prediction based on the conjectured supply function equilibrium model, and compared the theoretical optimum supply function to the actual function with the use of nonparametric models, which certified the validity of the model and analyzed the conduct of the generation firms.