Understanding strategic bidding in multi‐unit auctions: a case study of the Texas electricity spot market

Hortaçsu, Ali; Puller, Steven L.

doi:10.1111/j.0741-6261.2008.00005.x

Cited by 368 publications

(334 citation statements)

References 38 publications

(74 reference statements)

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“…Brown, Camerer, and Lovallo (2007) compare quantal response equilibrium, cursed equilibrium, and CH in the context of movie distributors' decisions to show movies to critics. Hortacsu and Puller (2008) show that older, more experienced firms behave closer to the Nash equilibrium prediction than other firms in electricity auctions. Che, Sudhir, and Seetharaman (2007) and Lim and Ho (2007) also explore the consequences of behavioral assumptions to firms.…”

Section: Related Structural Modelsmentioning

confidence: 72%

Who Thinks about the Competition? Managerial Ability and Strategic Entry in US Local Telephone Markets

Goldfarb

Xiao

2008

SSRN Journal

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Section: Related Structural Modelsmentioning

confidence: 72%

Who Thinks about the Competition? Managerial Ability and Strategic Entry in US Local Telephone Markets

Goldfarb

Xiao

2008

SSRN Journal

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“…Despite the theoretical problem pointed out by von der Fehr and colleagues, three empirical studies of the balancing market in Texas (ERCOT) suggest that the continuous representation is approximately correct in describing the behaviour of the largest producers in this market (Niu et al, 2005;Hortacsu and Puller, 2008;Sioshansi and Oren, 2007). Sweeting (2007) similarly estimates best responses to realizations of a smoothed residual demand schedule in the English Electricity Pool and is able to convincingly characterise the various phases of market evolution and the exercise of market power.…”

Section: Modelling Electricity Marketsmentioning

confidence: 99%

Supply function equilibria: Step functions and continuous representations

Holmberg

Newbery

Ralph

2013

Journal of Economic Theory

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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. Terms of use: Documents in EconStor may AbstractIn most wholesale electricity markets generators must submit step-function offers of supply to a uniform price auction, and the market is cleared at the price of the most expensive offer needed to meet realised demand. Such markets can most elegantly be modelled as the pure-strategy, Nash Equilibrium of continuous supply functions, in which each supplier has a unique profit maximising choice of supply function given the choices of other suppliers. Critics argue that the discreteness and discontinuity of the required steps can rule out pure-strategy equilibria and may result in price instability.This paper argues that if prices must be selected from a finite set the resulting step function converges to the continuous supply function as the number of steps increases, reconciling the apparently very disparate approaches to modelling electricity markets.

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“…is imperfect, even when it could be quite informative or at least complementary. A few studies, including Nevo (2001) and Hortaçsu and Puller (2008), combine A few studies, including Nevo (2001) and Hortaçsu and Puller (2008), combine direct and indirect cost measurement to cross-check their analyses and test the direct and indirect cost measurement to cross-check their analyses and test the hypothesis of equilibrium pricing. hypothesis of equilibrium pricing.…”

Section: Market Power and Price Competition Market Power And Price Comentioning

confidence: 99%

Empirical Industrial Organization: A Progress Report

Einav

Levin

2010

Journal of Economic Perspectives

114

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T T he fi eld of industrial organization has made dramatic advances over the he fi eld of industrial organization has made dramatic advances over the last few decades in developing empirical methods for analyzing imperfect last few decades in developing empirical methods for analyzing imperfect competition and the organization of markets. These new methods have competition and the organization of markets. These new methods have diffused widely: into merger reviews and antitrust litigation, regulatory decision diffused widely: into merger reviews and antitrust litigation, regulatory decision making, price setting by retailers, the design of auctions and marketplaces, and making, price setting by retailers, the design of auctions and marketplaces, and into neighboring fi elds in economics, marketing, and engineering. Increasing into neighboring fi elds in economics, marketing, and engineering. Increasing access to fi rm-level data and in some cases the ability to cooperate with fi rms or access to fi rm-level data and in some cases the ability to cooperate with fi rms or governments in experimental research designs is offering new settings and opporgovernments in experimental research designs is offering new settings and opportunities to apply these ideas in empirical work. tunities to apply these ideas in empirical work.This essay begins with a sketch of how the fi eld has evolved to its current state, This essay begins with a sketch of how the fi eld has evolved to its current state, in particular how the fi eld's emphasis has shifted over time from attempts to relate in particular how the fi eld's emphasis has shifted over time from attempts to relate aggregate measures across industries toward more focused studies of individual aggregate measures across industries toward more focused studies of individual industries. The second and primary part of the essay describes several active areas industries. The second and primary part of the essay describes several active areas of inquiry. While this is in some sense a survey, our goal is not to be comprehenof inquiry. While this is in some sense a survey, our goal is not to be comprehensive but to highlight key ideas and illustrate how modern research has approached sive but to highlight key ideas and illustrate how modern research has approached different problems. We also discuss some of the impacts of this research and specify different problems. We also discuss some of the impacts of this research and specify topics where research efforts have been more or less successful. The last section topics where research efforts have been more or less successful. The last section steps back to offer a broader perspective. We address some current debates about steps back to offer a broader perspective. We address some current debates about research emphasis in the fi eld, and more broadly about empirical methods, and research emphasis in the fi eld, and more broadly about empirical methods, and offer some thoughts on where future research might go. offer some thoughts on wh...

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Understanding strategic bidding in multi‐unit auctions: a case study of the Texas electricity spot market

Cited by 368 publications

References 38 publications

Who Thinks about the Competition? Managerial Ability and Strategic Entry in US Local Telephone Markets

Who Thinks about the Competition? Managerial Ability and Strategic Entry in US Local Telephone Markets

Supply function equilibria: Step functions and continuous representations

Empirical Industrial Organization: A Progress Report

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