An Agent-Based Test Bed Study of Wholesale Power Market Performance Measures

Wholesale power markets operating over transmission grids subject to congestion have distinctive features that complicate the detection of market power and operational inefficiency. This study uses a wholesale power market test bed with strategically learning traders to experimentally test the extent to which market performance measures commonly used for other industries are informative for the dynamic operation of restructured wholesale power markets. Examined measures, iuclude the Herfindahl-Hirschman Index (HHI), the Lerner Index (LI), the Residual Supply Index (R-SI), the Relative Market Advantage Index (RMAI), and the Operational Efficiency Index (OEI).