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An auction story: how simple bids struggle with uncertainty

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Bibliographic Details
Authors and Corporations: Richstein, Jörn C. (Author), Lorenz, Casimir (Author), Neuhoff, Karsten (Author)
Other Authors: Lorenz, Casimir [Author] • Neuhoff, Karsten 1973- [Author]
Type of Resource: E-Book
Language: English
published:
Series: Deutsches Institut für Wirtschaftsforschung: Discussion papers ; 1765
Subjects:
market design
electricity markets
bidding formats
auctions
Graue Literatur
Source: Verbunddaten SWB
Lizenzfreie Online-Ressourcen
Description
Summary: Short-term electricity markets are key to an efficient production by generation units. We develop a two-period model to assess different bidding formats to determine for each bidding format the optimal bidding strategy of competitive generators facing price-uncertainty. We compare the results for simple bidding, block bidding and multi-part bidding and find that even under optimal simple and block bidding generators face the risk of ex-post suboptimal solutions, whereas in multi-part bidding these do not occur. This points to efficiency gains of multi-part bidding in the presence of uncertainty in electricity markets.
Physical Description: 1 Online-Ressource (circa 32 Seiten); Illustrationen