An experimental test of automatic mitigation of wholesale electricity prices

Shawhan, Daniel L.; Messer, Kent D.; Schulze, William D.; Schuler, Richard E.

doi:10.1016/j.ijindorg.2010.06.005

Cited by 5 publications

(2 citation statements)

References 12 publications

(9 reference statements)

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“…For start-up bids, similar procedures apply. Shawhan, Messer, Schulze, and Schuler (2011) provide an experimental study on this type of market power mitigation rules. 9 Going-forward costs may thus differ depending on the duration for which ICAP is committed to be available.…”

Section: The New York Capacity Marketmentioning

confidence: 99%

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Strategic bidding in multi‐unit auctions with capacity constrained bidders: the New York capacity market

Schwenen

2015

The RAND J of Economics

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This article employs a simple model to describe bidding behavior in multi‐unit uniform price procurement auctions when firms are capacity constrained. Using data from the New York City procurement auctions for power generating capacity, I find that firms use simple bidding strategies to coordinate on an equilibrium that extracts high rents for all bidders. I show theoretically and empirically that the largest bidder submits the auction clearing bid. All other bidders submit inframarginal bids that are low enough to not be profitably undercut. Inframarginal bidders decrease their bids as the pivotal firm's capacities and its profits of undercutting increase.

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Section: The New York Capacity Marketmentioning

confidence: 99%

“…For start‐up bids, similar procedures apply. Shawhan, Messer, Schulze, and Schuler () provide an experimental study on this type of market power mitigation rules.…”

mentioning

confidence: 99%

Strategic bidding in multi‐unit auctions with capacity constrained bidders: the New York capacity market

Schwenen

2015

The RAND J of Economics

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When Does Public Information Undermine the Efficiency of Reverse Auctions for the Purchase of Ecosystem Services?

Messer

Duke

Lynch

et al. 2017

Ecological Economics

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Vertical separation vs. independent downstream entry in an electricity network: Experimental insights

Ciarreta

Fatás

Georgantzı́s

et al. 2017

Electric Power Systems Research

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We analyze a realistic simulation of a complex electricity network. We obtain the data with a series of experimental sessions designed to closely replicate the Spanish Electricity Market. In the experiments reported here we compare the status quo with two alternative regulatory market structures. In one of them, labeled as vertical separation, we impose that power generating firms and electricity distributors operate as independent business groups. In the second, we study the effect of entry by independent end-suppliers. Both alternative scenarios dominate the status quo in terms of market efficiency, but the latter of them dominates the former.

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An experimental test of automatic mitigation of wholesale electricity prices

Cited by 5 publications

References 12 publications

Strategic bidding in multi‐unit auctions with capacity constrained bidders: the New York capacity market

Strategic bidding in multi‐unit auctions with capacity constrained bidders: the New York capacity market

When Does Public Information Undermine the Efficiency of Reverse Auctions for the Purchase of Ecosystem Services?

Vertical separation vs. independent downstream entry in an electricity network: Experimental insights

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