This paper analyses capacity markets and proposes an approach to incorporate the flexibility of residential consumers in these markets considering reliability as a differentiated product. We introduce and assess the potential of non-linear pricing schemes, specifically priority pricing...

We consider consumer entry in the canonical monopolistic nonlinear pricing model ( Mussa and Rosen 1978) wherein consumers learn their preference “types” after incurring privately known entry costs. We show that by taking into account consumer entry, the nature of optimal nonlinear pricing...