Strategic Bidding in a Multiunit Auction: An Empirical Analysis of Bids to Supply Electricity in England and Wales

Wolfram, Catherine

doi:10.2307/2556090

Cited by 282 publications

(151 citation statements)

References 10 publications

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“…Natural Gas Intelligence provided daily natural gas spot prices for Transco Zone 6 non-New York. For oil and natural gas units, I add fuel distribution costs that I approximate as the difference between the average spot price in the region and the price PJM firms reports for delivered fuel over the summers of 1998(EIA form 423, 1998. To calculate SO 2 regulation costs, I use the mean of two monthly price indices of SO 2 permit prices that brokerage firms Cantor Fitzgerald and Fieldston report to the EPA.…”

Section: Discussionmentioning

confidence: 99%

Upstream Competition and Vertical Integration in Electricity Markets

Mansur

2007

The Journal of Law and Economics

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Many studies have found substantial market failures in electricity markets that have been restructured to allow wholesalers to set prices. Vertical integration of firms may partially mitigate market power, since integrated firms have a reduced interest in setting high prices. These producers sell electricity and also are required to buy power, which they provide to their retail customers at set rates. This paper examines the importance of vertical integration in explaining firm behavior during the first summer following the restructuring of the Pennsylvania, New Jersey, and Maryland wholesale market. I compare the behavior of two producers that, due to variation in state policy, had relatively few retail customers with the behavior of other firms. I conclude that restructuring led to an increase in anti-competitive behavior by large net sellers but that, overall, vertical integration both mitigates market power and diminishes its distributional impacts.

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Section: Discussionmentioning

confidence: 99%

Upstream Competition and Vertical Integration in Electricity Markets

Mansur

2007

The Journal of Law and Economics

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“…It is then when these CHP plants are moved from the flexible to the base-load category that we encounter the further problem discussed earlier: the fact that a generation company owning both baseload and non-baseload plant may enjoy enhanced incentives to restrict peak production, so that its baseload plants (under some pricing circumstances) earn inframarginal rents (Wolfram, 1998).…”

Section: The Structure Of Regional Generation Markets In Russiamentioning

confidence: 99%

Restructuring the Russian electricity sector: Re-creating California?

Pittman¹

2007

Energy Policy

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The Russian Federation has begun restructuring its electricity sector, following the standard restructuring model of complete vertical separation of generation from transmission, with the aim of creating competition in regional generation markets. This paper examines the structure of the six principal regional generation markets that are in their early stages of development and argues that they are likely to be characterized by high levels of market power on the part of individual privatized generation companies, especially during the peak winter demand season. These levels -considerably higher than those that caused competitive problems in California -seem to create a serious risk of price spikes in deregulated wholesale electricity markets, and thus of significant price increases to consumers of electricity.JEL categories: L13, L22, L94, L98, P28

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“…In contrast to most existing results based on a static analysis (e.g., Wolfram 1998 andHortacsu andPuller 2004), Mansur (2008) examines the dynamic decision problem of the generator subject to upward and downward ramping constraints to show that the resulting optimal policy of the price-taking generator may deviate from marginal cost pricing. Our model differs from Mansur (2008) as we obtain the deviation from marginal cost pricing as a consequence of the upward ramping rate constraint alone.…”

Section: Introductionmentioning

confidence: 95%

Efficiency and marginal cost pricing in dynamic competitive markets with friction

Cho

Meyn

2007

2007 46th IEEE Conference on Decision and Control

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. This paper examines a dynamic general equilibrium model with supply friction. With or without friction, the competitive equilibrium is efficient. Without friction, the market price is completely determined by the marginal production cost. Terms of use: Documents in EconStor mayIf friction is present, no matter how small, then the market price fluctuates between zero and the "choke-up" price, without any tendency to converge to the marginal production cost, exhibiting considerable volatility. The distribution of the gains from trading in an efficient allocation may be skewed in favor of the supplier, although every player in the market is a price taker.

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Strategic Bidding in a Multiunit Auction: An Empirical Analysis of Bids to Supply Electricity in England and Wales

Cited by 282 publications

References 10 publications

Upstream Competition and Vertical Integration in Electricity Markets

Upstream Competition and Vertical Integration in Electricity Markets

Restructuring the Russian electricity sector: Re-creating California?

Efficiency and marginal cost pricing in dynamic competitive markets with friction

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