Author: Edward J. Anderson, Pär Holmberg and Andrew B. Philpott Keywords: Pay-as-bid Auction; Divisible Good Auction; Mixed Strategy Equilibria; Wholesale Electricity Markets Pages: 71 Published: November 24, 2009 JEL-codes: D43; D44; C72 Download Wp814.pdf (756 kB) Abstract Using the concept of...

Generators in a wholesale electricity market can exercise market power, but the existence of forward hedging contracts between consumers and generators mitigates this market power. In our model we look at the role of the consumers (retailers here) in offering forward contracts. To deal with the...

We consider price competition with a linear demand function and compare two cases. In the first case each distribution channel is vertically integrated, while in the second, decentralised, case the manufacturers and retailers act independently. We explore the effect of varying the level of price...

Producers submit offer curves to a procurement auction, e.g. an electricity auction, before uncertain demand has been realised. In the supply function equilibrium (SFE), every firm commits to the offer curve that maximises its expected profit, given the offer curves of competitors. The...

In multi-unit auctions, such as auctions of commodities and securities, and financial exchanges, it is necessary to specify rationing rules to break ties between multiple marginal bids. The standard approach in the literature and in practice is to ration marginal bids proportionally. This paper...

Transport constraints limit competition and arbitrageurs' possibilities of exploiting price differences between commodities in neighbouring markets. We analyze a transportation network where oligopoly producers compete with supply functions under uncertain demand, as in wholesale electricity...

Transport constraints limit competition and arbitrageurs' possibilities of exploiting price differences between goods in neighbouring markets, especially when storage capacity is negligible. We analyse this in markets where strategic producers compete with supply functions, as in wholesale...