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.
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 language | English |
---|---|
Publisher | Edinburgh School of Economics Discussion Paper Series |
Number of pages | 21 |
Publication status | Published - 2006 |
Publication series
Name | ESE Discussion Papers |
---|---|
No. | 143 |
Keywords / Materials (for Non-textual outputs)
- electricity pool
- multi-unit auction
- revenue ranking
- D44
- L13
- L94