Single or Multiple Pricing in Electricity Pools?

Research output: Working paperDiscussion paper

Abstract

We 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.
Original languageEnglish
PublisherEdinburgh School of Economics Discussion Paper Series
Number of pages21
Publication statusPublished - 2006

Publication series

NameESE Discussion Papers
No.143

Keywords

  • electricity pool
  • multi-unit auction
  • revenue ranking
  • D44
  • L13
  • L94

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