Bidding asymmetries in multi-unit auctions: Implications of bid function equilibria in the British spot market for electricity
| Autor: | Helen V. Tauchen, Joseph Crespo, Gregory S. Crawford |
|---|---|
| Přispěvatelé: | University of Zurich, Crawford, Gregory S |
| Rok vydání: | 2007 |
| Předmět: |
Economics and Econometrics
Strategy and Management media_common.quotation_subject Economics Econometrics and Finance (miscellaneous) industrial and manufacturing engineering 2002 Economics and Econometrics 2001 Economics Econometrics and Finance (miscellaneous) Microeconomics Empirical research 10007 Department of Economics 2202 Aerospace Engineering 1408 Strategy and Management Economics Common value auction 2209 Industrial and Manufacturing Engineering Function (engineering) Industrial relations media_common 1410 Industrial Relations business.industry Corporate governance TheoryofComputation_GENERAL Spot market Bidding 330 Economics aerospace engineering Electricity business |
| Zdroj: | International Journal of Industrial Organization. 25:1233-1268 |
| ISSN: | 0167-7187 |
| DOI: | 10.1016/j.ijindorg.2006.10.001 |
| Popis: | This paper introduces and tests Bid Function Equilibria (BFE) in the British spot market for electricity. BFE extend von der Fehr and Harbord's (1993) multi-unit auction model of wholesale electricity markets by allowing firms to have heterogeneous costs for different generating units. Pure-strategy equilibria in BFE predict asymmetric bidding by producers: a single firm (the “price-setter") bids strategically while other firms (“non-price-setters") bid their costs. We test for asymmetries in firms' bid functions in the British spot market between 1993 and 1995 and find strong empirical support for the theory. We conclude that BFE have important implications for the design and governance of electricity markets. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
|
Full Text from ScienceDirect