Market Power and Efficiency in a Computational Electricity Market with Discriminatory Double-Auction Pricing
This study reports experimental market power and efficiency outcomes for a computational wholesale electricity market operating in the short run under systematically varied concentration and capacity conditions. The pricing of electricity is determined by means of a clearinghouse double auction with discriminatory midpoint pricing. Buyers and sellers use a modified Roth-Erev individual reinforcement learning algorithm to determine their price and quantity offers in each auction round. It is shown that high market efficiency is generally attained and that market microstructure is strongly predictive for the relative market power of buyers and sellers, independently of the values set for the reinforcement learning parameters. Results are briefly compared against results from an earlier study in which buyers and sellers instead engage in social mimicry learning via genetic algorithms. Annotated pointers to related work can be accessed here: http://www2.econ.iastate.edu/tesfatsi/aelect.htm
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|Date of creation:||01 Oct 2001|
|Publication status:||Published in IEEE Transactions on Evolutionary Computation, October 2001, vol. 5 no. 5, pp. 504-523|
|Contact details of provider:|| Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070|
Phone: +1 515.294.6741
Fax: +1 515.294.0221
Web page: http://www.econ.iastate.edu
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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.:
- Paul Klemperer, 2002.
"What Really Matters in Auction Design,"
Journal of Economic Perspectives,
American Economic Association, vol. 16(1), pages 169-189, Winter.
- Professor Paul Klemperer, 2000. "What Really Matters in Auction Design," Microeconomics 0004008, EconWPA.
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- Klemperer, P., 1999. "Auction Theory: a Guide to the Literature," Economics Papers 1999-w12, Economics Group, Nuffield College, University of Oxford.
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- Tesfatsion, Leigh, 2001. "Structure, behavior, and market power in an evolutionary labor market with adaptive search," Journal of Economic Dynamics and Control, Elsevier, vol. 25(3-4), pages 419-457, March.
- Leigh Tesfatsion, 2000. "Structure, Behavior, and Market Power in an Evolutionary Labor Market with Adaptive Search," Computational Economics 0004002, EconWPA.
- Tesfatsion, Leigh S., 2009. "Structure, Behavior, and Market Power in an Evolutionary Labor Market with Adaptive Search," Staff General Research Papers Archive 1681, Iowa State University, Department of Economics.
- Tesfatsion, Leigh S., 2001. "Structure, Behavior, and Market Power in an Evolutionary Labor Market with Adaptive Search," Staff General Research Papers Archive 1914, Iowa State University, Department of Economics.
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- Vriend, Nicolaas J., 2000. "An illustration of the essential difference between individual and social learning, and its consequences for computational analyses," Journal of Economic Dynamics and Control, Elsevier, vol. 24(1), pages 1-19, January. Full references (including those not matched with items on IDEAS)
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