# X-model: further development and possible modifications

## TL;DR

This paper enhances the X-model by transforming supply and demand curves, reducing computational complexity, increasing forecasting accuracy, and improving robustness against outliers, thus broadening its practical applicability.

## Contribution

It introduces a novel modification to the X-model using transformed curves with inelastic demand, significantly improving performance and robustness.

## Key findings

- Forecasting power increases substantially.
- Computational requirements are reduced.
- Model becomes more robust to outliers.

## Abstract

Despite its critical importance, the famous X-model elaborated by Ziel and Steinert (2016) has neither bin been widely studied nor further developed. And yet, the possibilities to improve the model are as numerous as the fields it can be applied to. The present paper takes advantage of a technique proposed by Coulon et al. (2014) to enhance the X-model. Instead of using the wholesale supply and demand curves as inputs for the model, we rely on the transformed versions of these curves with a perfectly inelastic demand. As a result, computational requirements of our X-model reduce and its forecasting power increases substantially. Moreover, our X-model becomes more robust towards outliers present in the initial auction curves data.