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Uniform Pricing or Pay-as-Bid Pricing: A Dilemma for California and Beyond

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Abstract

Any belief that a shift from uniform to as-bid pricing would provide power purchasers substantial relief from soaring prices is simply mistaken. The immediate consequence of its introduction would be a radical change in bidding behavior that would introduce new inefficiencies, weaken competition in new generation, and impede expansion of capacity.

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File URL: http://www.cramton.umd.edu/papers2000-2004/kahn-cramton-porter-tabors-uniform-or-pay-as-bid-pricing-ej.pdf
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Bibliographic Info

Paper provided by University of Maryland, Department of Economics - Peter Cramton in its series Papers of Peter Cramton with number 01ej.

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Length: 20 pages
Date of creation: 27 Jan 2001
Date of revision: 27 Jan 2001
Publication status: Published in Electricity Journal, 70-79, July 2001
Handle: RePEc:pcc:pccumd:01ej

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Postal: Economics Department, University of Maryland, College Park, MD 20742-7211
Phone: (202) 318-0520
Fax: (202) 318-0520
Web page: http://www.cramton.umd.edu

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Keywords: Auctions; Electricity Auctions; Multiple Item Auctions;

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Cited by:
  1. Heim, Sven & Götz, Georg, 2013. "Do pay-as-bid auctions favor collusion? Evidence from Germany's market for reserve power," ZEW Discussion Papers, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research 13-035, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  2. Peter Cramton, 2009. "Spectrum Auction Design," Papers of Peter Cramton, University of Maryland, Department of Economics - Peter Cramton 09sad, University of Maryland, Department of Economics - Peter Cramton, revised 2012.
  3. Vítor Marques & Isabel Soares & Adelino Fortunato, 2008. "Uniform Price Market and Behaviour Pattern: What Does the Iberian Electricity Market Point Out?," GEMF Working Papers, GEMF - Faculdade de Economia, Universidade de Coimbra 2008-08, GEMF - Faculdade de Economia, Universidade de Coimbra.
  4. Anke Weidlich & Daniel Veit, 2008. "Agent-Based Simulations for Electricity Market Regulation Advice: Procedures and an Example," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 228(2+3), pages 149-172, June.
  5. Hästö, Peter & Holmberg, Pär, 2005. "Some Inequalities related to the analysis of electricity auctions," Working Paper Series, Uppsala University, Department of Economics 2005:23, Uppsala University, Department of Economics.
  6. Holmberg, Pär & Newbery, David, 2010. "The supply function equilibrium and its policy implications for wholesale electricity auctions," Utilities Policy, Elsevier, Elsevier, vol. 18(4), pages 209-226, December.
  7. Holmberg, Pär, 2009. "Supply Function Equilibria of Pay-as-Bid Auctions," Working Paper Series, Research Institute of Industrial Economics 787, Research Institute of Industrial Economics.
  8. Eric Guerci & Stefano Ivaldi & Silvano Cincotti, 2008. "Learning Agents in an Artificial Power Exchange: Tacit Collusion, Market Power and Efficiency of Two Double-auction Mechanisms," Computational Economics, Society for Computational Economics, Society for Computational Economics, vol. 32(1), pages 73-98, September.
  9. Holmberg, Pär, 2005. "Comparing Supply Function Equilibria of Pay-as-Bid and Uniform-Price Auctions," Working Paper Series, Uppsala University, Department of Economics 2005:17, Uppsala University, Department of Economics.
  10. Flinkerbusch, Kai, 2011. "A more efficient procurement mechanism for reserver capacity in the German market for balancing power," CAWM Discussion Papers, Center of Applied Economic Research Münster (CAWM), University of Münster 52, Center of Applied Economic Research Münster (CAWM), University of Münster.
  11. David McAdams & Giuseppe Lopomo & Leslie Marx & Brian Murray, . "Carbon Allowance Auction Design: An Assessment of Options for the U.S," Working Papers, Duke University, Department of Economics 10-64, Duke University, Department of Economics.
  12. Natalia Fabra & Nils‐Henrik Fehr & David Harbord, 2006. "Designing electricity auctions," RAND Journal of Economics, RAND Corporation, RAND Corporation, vol. 37(1), pages 23-46, 03.
  13. Müller, Gernot & Rammerstorfer, Margarethe, 2008. "A theoretical analysis of procurement auctions for tertiary control in Germany," Energy Policy, Elsevier, Elsevier, vol. 36(7), pages 2620-2627, July.
  14. Kai Flinkerbusch, . "A more efficient procurement mechanism for reserve capacity in the German market for balancing power," Working Papers, Institute of Spatial and Housing Economics, Munster Universitary 201178, Institute of Spatial and Housing Economics, Munster Universitary.
  15. Zou, Xiaoyan, 2009. "Double-sided auction mechanism design in electricity based on maximizing social welfare," Energy Policy, Elsevier, Elsevier, vol. 37(11), pages 4231-4239, November.
  16. Giuseppe Lopomo & Leslie M. Marx & David McAdams & Brian Murray, 2011. "Carbon Allowance Auction Design: An Assessment of Options for the United States," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 5(1), pages 25-43, Winter.

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