Single or Multiple Pricing in Electricity Pools?
AbstractWe present a 2 bidder multi-unit, common cost auction model with uncertain demand and capacity constraints which ensure that the participants sometimes face a residual market share. The model is motivated by electricity pools. We show that a single-price auction where the bidders can submit only one bid for all units weakly dominates an auction where the bidders can make multiple-price bids in terms of average prices. In the case of uniform price auctions we give an example where the dominance is strict.
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Bibliographic InfoPaper provided by Edinburgh School of Economics, University of Edinburgh in its series ESE Discussion Papers with number 143.
Date of creation: 01 Sep 2006
Date of revision:
Electricity Pool; Multi-Unit Auction; Revenue Ranking;
Find related papers by JEL classification:
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-09-11 (All new papers)
- NEP-COM-2006-09-11 (Industrial Competition)
- NEP-ENE-2006-09-11 (Energy Economics)
- NEP-IND-2006-09-11 (Industrial Organization)
- NEP-MIC-2006-09-11 (Microeconomics)
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Open Access publications from Tilburg University
urn:nbn:nl:ui:12-381122, Tilburg University.
- Noussair, Charles, 1995. "Equilibria in a Multi-object Uniform Price Sealed Bid Auction with Multi-unit Demands," Economic Theory, Springer, vol. 5(2), pages 337-51, March.
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