On European Electricity Market Liberalization: A Game-Theoretic Approach

Katerina Stankova*, Geert Jan Olsder, Bart De Schutter

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review


In this paper, we deal with the european electricity market liberalization problem, formulated as a game with electricity producers as players, while the consumers' electricity demand is exogenous. The producers maximize their profit by choosing how much electricity they will produce individually by means of electricity production available to them. The aim of the research presented in this paper is to investigate the differences between the resulting electricity prices with different scenarios: a market with one stackelberg leading producer, a market with two stackelberg leading producers being noncooperative among themselves, and a perfectly competitive market. In the case studies the games involving one, two, and eight european countries are played. In the scenarios dealt with in this paper the perfectly competitive market yields the lowest electricity prices for the consumers. However, we also discuss possible drawbacks of liberalization. Our research aims to help understanding the complex process of electricity market liberalization.
Original languageEnglish
Pages (from-to)267-280
Issue number4
Publication statusPublished - Nov 2010
Externally publishedYes


  • Electricity market liberalization
  • perfect competition
  • Nash equilibrium
  • Stackelberg equilibrium

Cite this