To stop neighbors from ripping each other off on electricity prices, you only need four people in the area to own a battery.
March 23, 2026
Original Paper
Market Power and Platform Design in Decentralized Electricity Trading
arXiv · 2603.19988
The Takeaway
In decentralized green energy markets, people with solar panels act like mini-monopolies, withholding power to drive up prices. While we usually think you need massive competition to prevent price manipulation, this research proves that the 'market power' distortion almost entirely vanishes as soon as storage is split among just four different owners.
From the abstract
This paper studies how platform design shapes strategic behavior in decentralized electricity trading. We develop a finite-horizon dynamic game in which photovoltaic- and battery-equipped players ("prosumers") trade on a platform that maps aggregate imports and exports into internal buy and sell prices. We establish existence of a perfect conditional epsilon-equilibrium and characterize a Cournot-like market-power mechanism in an observable-types benchmark of the game: because the producer price