Analysing the Impact of Rationality on the Italian Electricity Market.

Summary We analyze the behavior of the Italian electricity market with an agent-based model. In particular, we are interested in testing the assumption that the market participants are fully rational in the economical sense. To this aim, we extend a previous model by considering a wider class of cases. After checking that the new model is a correct generalization of the existing model, we compare three optimization methods to implement the agents rationality and we verify that the model exhibits a very good fit to the real data. This leads us to conclude that our model can be used to predict the behavior of this market.