Single or Multiple Pricing in Electricity Pools?

Ahmed Anwar ()

ESE Discussion Papers from Edinburgh School of Economics, University of Edinburgh

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.

Keywords: Electricity Pool; Multi-Unit Auction; Revenue Ranking (search for similar items in EconPapers)
JEL-codes: D44 L13 L94 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-ene, nep-ind and nep-mic
Date: 2006-09-01
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Persistent link: http://EconPapers.repec.org/RePEc:edn:esedps:143

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