<p>This paper studies the participation of renewable-based microgrids in the retail market. The developed model is designed as a bi-level optimization approach. At the higher level, a distribution system operator (DSO), as the decision-maker for problem, takes part in the wholesale market to buy energy. Also, it participates in the retail market to increase its profit by selling energy to the microgrids. Moreover, at the upper level, in addition to supplying electrical energy, the provision of thermal energy to consumers is also considered, enabling the DSO to achieve greater profitability through improved efficiency. The lower level is responsible for modeling the interaction between the DSO and microgrids, where the microgrids aim to minimize their daily cost. In the proposed model, transactive energy and prices between the DSO and microgrids are the decision variables. Unlike existing models, microgrids can collaborate to convert the original non-cooperative games to hybrid cooperative and non-cooperative games. This change increases the bargaining power of microgrids and leads to a reduction in retail market prices and a decrease in microgrid operating costs. The results show that the proposed model improves operation cost and energy not supplied of microgrids by 9.09% and 33.56%, respectively.</p>