Strategic Behaviour, Resource Valuation and Competition in Electricity Markets
Miguel Espinosa Farfan () and
Alvaro Riascos ()
Documentos CEDE from Universidad de los Andes â€“ Facultad de Economía â€“ CEDE
By means of a suitable Bayesian game we study spot electricity markets from a structural point of view. We address the problem of individual and aggregate eficciency and we show how to value water from market observables. We compare the former to engineering methods and apply our methodology to Colombian spot electricity market. Our results show that big gas and small hydro plants overbid, resources are undervalued by engineering costs and aggregate costs would have been considerably smaller if agents had played optimally. Revealed costs show a substantial gain in eficciency in the Vickrey auction compared to the actual uniform auction.
Keywords: Multi-unit auctions; Oligopoly; electricity markets (search for similar items in EconPapers)
JEL-codes: D43 D44 L94 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cse, nep-ene and nep-ind
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Persistent link: https://EconPapers.repec.org/RePEc:col:000089:006856
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