With regarding to the capacity withholding problem in a power market， a model maximizing the profit of the power producer under nodal price mechanism is proposed and the game between the producers is solved with an iterative approach. With this model， the impacts of capacity withholding on system adequacy are evaluated based on Monte-Carlo simulation. Moreover， the impacts of transmission constraints and market concentration on power system reliability are studied and the countermeasures for improving the system adequacy by reducing capacity withholding are proposed. The theory and the approach are illustrated by the IEEE RTS-79 system.