Evolutionary representation of energy markets and systems

This paper presents the application of a new branch of the economical theory - evolutionary games and bounded rationality - to energy markets under development. The model is able to correctly represent 1) all traditional physical system characteristics, 2) agent's behavior, including bounded rationality, lack of information, learning capability, etc. 3) market's dynamics and evolution, including responses to players' actions, regulatory changes, consumers' reactions, etc. A case study with a realistic market illustrates the proposed model. More than just an equilibrium solution, the proposed model is able to completely describe the process that led to this point, including agent's learning dynamics (with successes and failures), market responses, etc.