# Electricity Market Equilibrium under Information Asymmetry

## TL;DR

This paper analyzes how information asymmetry affects equilibrium in a two-stage electricity market with renewable uncertainty, highlighting the benefits of information sharing for system efficiency.

## Contribution

It introduces a model of a two-stage electricity market with asymmetric information and demonstrates the impact of information sharing on equilibrium and system value.

## Key findings

- Equilibrium solutions are highly sensitive to information asymmetry.
- Sharing information improves economic and operational outcomes.
- Potential for computational benefits through better information dissemination.

## Abstract

We study a competitive electricity market equilibrium with two trading stages, day-ahead and real-time. The welfare of each market agent is exposed to uncertainty (here from renewable energy production), while agent information on the probability distribution of this uncertainty is not identical at the day-ahead stage. We show a high sensitivity of the equilibrium solution to the level of information asymmetry and demonstrate economic, operational, and computational value for the system stemming from potential information sharing.

---
Source: https://tomesphere.com/paper/1905.09793