This paper discusses a capacity-based redispatch mechanism in which awarded market participants are compensated for their availability for redispatch, rather than activation. The rationale is to develop a market design that prevents so-called 'inc-dec gaming' when including flexible consumers...

The spectrum for third generation (3G) mobile communications for the German market was alloted to operators by means of an auction. This resulted in a highly competitive outcome: six operators were given rights to provide 3G services. Government revenues from this auction were a staggering EUR...

This paper proposes a game-theoretic model to analyze the strategic behavior of inc-dec gaming in market-based congestion management (redispatch). We extend existing models by considering incomplete information about competitors' costs and a finite set of providers. We find that these extensions...

The spectrum for third generation (3G) mobile communications for the German market was alloted to operators by means of an auction. This resulted in a highly competitive outcome: six operators were given rights to provide 3G services. Government revenues from this auction were a staggering EUR...

We present the first general positive result on the construction of collusion-resistant mechanisms, that is, mechanisms that guarantee dominant strategies even when agents can form arbitrary coalitions and exchange compensations (sometimes referred to as transferable utilities or side payments)....

The literature on deregulated electricity markets generally assumes available capacities to be given. In contrast, this paper studies a model where firms precommit to capacity levels before competing in a uniform price auction. The analysis sheds light on recent empirical findings that firms use...

Forward sales is a credible commitment to aggressive spot market bidding, and it mitigates producers’ market power in electricity markets. Still it can be profitable for a producer to make such a commitment if it results in a soft response from competitors in the spot market (strategies are...

This paper analyzes the signaling effect of bidding in a two-round elimination contest. Before the final round, bids in the preliminary round are revealed and act as signals of the contestants' private valuations. Depending on his valuation, a contestant may have an incentive to bluff or sandbag...

From the regulation of sports to lawmaking in parliament, in many situations one group of people ("agents") make decisions that affect payoffs of others ("principals") who may offer action-contingent transfers in order to sway the agents' decisions. Prat and Rustichini (2003) characterize...