Market power monitoring in China’s electricity market: an analysis based on the evolutionary game theory

Market power monitoring of power generators is an important part of power market monitoring. Based on evolutionary game theory, this paper constructs a game model among three different power market participants: the regulatory authority, the market operator, and the power generator, discusses the evolutionary stable solution of the model, and conducts simulations to analyze the influence of the reward and punishment mechanism of the regulatory authority on the strategy choice of participants. We find that the monitoring role of the market operator is limited, and the regulatory authority need to advocate the development of an independent third-party monitoring agency to avoid market power abuse. Our findings have certain inspiration for the regulatory authority to formulate effective power market monitoring policies.