IDEAS home Printed from https://ideas.repec.org/p/isu/genstf/201811010700001028.html
   My bibliography  Save this paper

Braided Cobwebs: Cautionary Tales for Dynamic Pricing in Retail Electric Power Markets

Author

Listed:
  • Thomas, Auswin George
  • Tesfatsion, Leigh

Abstract

This study investigates the effects of dynamic-price retail contracting on integrated retail and wholesale (IRW) power market operations. Performance is evaluated by means of carefully defined metrics for system stability and market participant welfare. The study is carried out for an IRW Test Case for which 500 households have price-responsive air-conditioning systems. It is shown that dynamic-price retail contracting can give rise to braided cobweb dynamics consisting of two interwoven cycles for power and price levels exhibiting either stability or instability depending on system conditions. Moreover, even in stable cases, dynamic-price retail contracts generally result in worse welfare outcomes for households than flat-rate retail contracts.

Suggested Citation

  • Thomas, Auswin George & Tesfatsion, Leigh, 2018. "Braided Cobwebs: Cautionary Tales for Dynamic Pricing in Retail Electric Power Markets," ISU General Staff Papers 201811010700001028, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genstf:201811010700001028
    as

    Download full text from publisher

    File URL: https://dr.lib.iastate.edu/server/api/core/bitstreams/fb1a7ba9-114c-4fb8-880b-1a72052bccbe/content
    Download Restriction: no
    ---><---

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:isu:genstf:201811010700001028. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Curtis Balmer (email available below). General contact details of provider: https://edirc.repec.org/data/deiasus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.