A Stateful Stochastic Allocation Mechanism with Fairness Guarantees for Networked Electricity Systems

Abstract

This paper develops and analyses the Fair Play Automatic Market Maker (FP-AMM), a programmable electricity allocation mechanism in which scarcity allocation is treated as a controlled, stateful, and auditable cyber-physical process. Existing mechanisms such as locational marginal pricing are memoryless and cannot account for historical service outcomes, preventing guarantees of equitable treatment across market intervals. The FP-AMM employs a two-stage stochastic clearing rule comprising service-priority sampling and inverse-fairness weighting, coupled with a DC-OPF feasibility set and bounded shortage memory updated through a saturated integrator. Four main results are established. First, the shortage-memory state is invariant in $[0,1]^N$ and the update map is a contraction with rate $1-\beta$. Second, the intra-interval clearing operator converges linearly to a unique fixed point with contraction factor $q\in(0,1)$. Third, under the Fair Play priority rule, the per-node delivery ratio converges almost surely to the contracted target $F^\star$, with a finite-time $O(1/\sqrt{T})$ bound obtained via Lyapunov analysis of the deficit recursion. Fourth, event-triggered execution guarantees practical ultimate boundedness of the allocation tracking error and quantifies the computation-fidelity trade-off. The mechanism is validated on the IEEE 14-, 57-, and 118-bus systems over $T=5000$ market intervals. Fairness convergence to $F^\star$ is achieved on all benchmarks, peak weak-bus fairness error is reduced by 54% on the IEEE-57 network and by up to 55% relative to an equal-weight baseline during scarcity periods, and DC feasibility is maintained throughout.