We analyze a drastic price increase in the German auction market for reserve power, which did not appear to be driven by increased costs. Studying the market structure and individual bidding strategies, we find evidence for collusive behavior in an environment with repeated auctions, pivotal...

In Germany and beyond, various capacity mechanisms are currently being discussed with a view to improving the security of electricity supply. One of these mechanisms is a strategic reserve that retains generation capacity for use in times of critical supply shortage. We argue that strategic...

Auctions are the allocation-mechanisms of choice whenever goods and information in a market are scarce. Therefore, understanding how information in these markets affects welfare and revenues is of fundamental interest. We introduce new mathematical concepts, k- and k-m-dispersion, for...

We study the allocation of German lawyers to different regional courts for their compulsory legal traineeship. The number of applicants exceeds the number of available positions in a given time period in some regions, so that not all lawyers can be matched simultaneously. As a consequence some...

Theory points to a potential trade-off between two main school assignment mechanisms; Boston and Deferred Acceptance (DA). While DA is strategy-proof and gives a stable matching, Boston might outperform DA in terms of ex-ante efficiency. We quantify the (dis)advantages of the mechanisms by using...

A recent debate raises the question whether market interaction erodes social responsibility. In an experiment, we disentangle three major characteristics of market interaction, diffusion of responsibility, social information, and market framing, and provide evidence for how these characteristics...

Despite negative experiences with auctioning off subsidies for renewable energy in some countries, tenders are increasingly used today. We develop a reverse auction which accounts for particularities of intermittent renewable energy sources. Determining the quantity, demanded by the regulator,...

In this article, we study the impact of an institutional intervention on market efficiency in Ethiopia. More specifically, we study whether regional warehouses that are connected to a national commodity exchange reduce transaction cost and price dispersion between regions. In order to identify...

In this paper, the trade-off between inefficient transmission forward markets (in nodal pricing regimes) and the inefficiency induced by hiding transmission constraints from the market (in zonal pricing regimes) is analyzed. First, a simple two node model formalizing the general trade-off is...

In liberalized power systems, generation and transmission services are unbundled, but remain tightly interlinked. Congestion management in the transmission network is of crucial importance for the efficiency of these inter-linkages. Different regulatory designs have been suggested, analyzed and...