This paper seeks to bridge the gap between economists focused on designing competitive market mechanisms and engineers focused on the physical attributes and engineering requirements they perceive as being needed for operating a reliable electric power system. The paper starts by deriving the...

We examine whether and how the allocation of financial transmission rights affects the behavior of electricity generators and electricity consumers with market power in the electricity market. The analysis recognizes that the ultimate allocation of rights is endogenous, depending both on whether...

We examine whether and how the allocation of physical rights to utilize congested transmission links affects the behavior of electricity generators and electricity consumers with market power in the electricity market. The paper extends the analysis of financial transmission rights contained in...