Quantity-before-Price Auction: Evaluating the Performance of the Brazilian Existing Energy Market
AbstractIn this paper we study the outcome of the six rst \existing energy" auctions in Brazil. Under the current regulatory regime, the bulk of the trade between existing generators and distribution companies is done through bilateral eight-year contracts, negotiated in auctions organized by the regulatory agency. These so-called existing energy auctions follow a speci c rule that we call quantity-before-price auction. In this paper we develop an auction model to study this type of game and take the model to the data. The structural model enables us to estimate the opportunity cost of selling energy for each generator, which is the price they expect to obtain in the free market in the future. We nd that, while auction prices have steadily risen, the opportunity cost has increased even faster over time, indicating that the generators anticipate a faster increase in energy prices than what is measured by auction prices.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Universidade de São Paulo, Faculdade de Economia, Administração e Contabilidade de Ribeirão Preto in its series Working Papers with number 08-2010.
Date of creation: 2010
Date of revision:
Auctions; Electricity; Brazil;
Find related papers by JEL classification:
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Guerre, E. & Perrigne, I. & Vuong, Q., 1995. "Nonparametric Estimation of First-Price Auctions," Papers 9504, Southern California - Department of Economics.
- Dutra, Joisa & Menezes, Flavio, 2005. "Lessons from the Electricity Auctions in Brazil," The Electricity Journal, Elsevier, vol. 18(10), pages 11-21, December.
- Moita, Rodrigo M. S., 2006. "Entry and Externality: Hydroelectric Generators in Brazil," Insper Working Papers wpe_61, Insper Working Paper, Insper Instituto de Ensino e Pesquisa.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Bruno Vizona Liberato).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.