With a significant number of states in the U.S. and

countries around the world trading electricity in restructured markets,

a sizeable proportion of capacity expansion in the future will

have to take place in market-based environments. However, since a

majority of the literature on capacity expansion is focused on regulated

market structures, there is a critical need for comprehensive

capacity expansion models targeting restructured markets. In this

research, we develop a two-tier matrix game model, and a novel solution

algorithm that incorporates risk due to volatilities in profit

(via CVaR), intended for use by generators to make multi-period,

multi-player generation capacity expansion decisions. We demonstrate

the applicability of the model using a sample network from

PowerWorld software and analyze the results.