Price Regulations in a Multi-unit Uniform Price Auction

Research output: Contribution to conferencePaperResearchpeer-review

Abstract

Inspired by recent regulations in the New York ICAP market we examine the effect of different price regulations on a multi-unit uniform price auction. We investigate a bid cap and a bid foor. Given suffciently high total capacities general bid caps always ensure that the market price does not exceed the price cap whereas a selective bid cap for only the larger firms, does not guarantee this outcome. A sufficiently high bid floor always destroys pure strategy equilibria with equilibrium prices above the marginal costs, no matter whether the floor applies to all or only to relatively small firms.
Inspired by recent regulations in the New York ICAP market we examine the effect of different price regulations on a multi-unit uniform price auction. We investigate a bid cap and a bid foor. Given suffciently high total capacities general bid caps always ensure that the market price does not exceed the price cap whereas a selective bid cap for only the larger firms, does not guarantee this outcome. A sufficiently high bid floor always destroys pure strategy equilibria with equilibrium prices above the marginal costs, no matter whether the floor applies to all or only to relatively small firms.

Workshop

WorkshopThe 9th Nordic Workshop in Industrial Organization. NORIO 2014
Number9
LocationUniversity of Oslo
CountryNorway
CityOslo
Period02/06/201403/06/2014
Internet address

Keywords

    Cite this

    Boom, A. (2014). Price Regulations in a Multi-unit Uniform Price Auction. Paper presented at The 9th Nordic Workshop in Industrial Organization. NORIO 2014, Oslo, Norway.
    Boom, Anette. / Price Regulations in a Multi-unit Uniform Price Auction. Paper presented at The 9th Nordic Workshop in Industrial Organization. NORIO 2014, Oslo, Norway.27 p.
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    abstract = "Inspired by recent regulations in the New York ICAP market we examine the effect of different price regulations on a multi-unit uniform price auction. We investigate a bid cap and a bid foor. Given suffciently high total capacities general bid caps always ensure that the market price does not exceed the price cap whereas a selective bid cap for only the larger firms, does not guarantee this outcome. A sufficiently high bid floor always destroys pure strategy equilibria with equilibrium prices above the marginal costs, no matter whether the floor applies to all or only to relatively small firms.",
    keywords = "Electricity, Capacity markets, Price regulation",
    author = "Anette Boom",
    year = "2014",
    language = "English",
    note = "null ; Conference date: 02-06-2014 Through 03-06-2014",
    url = "http://www.sv.uio.no/econ/english/research/news-and-events/events/conferences/2014/dokumenter/programme.html",

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    Boom, A 2014, 'Price Regulations in a Multi-unit Uniform Price Auction' Paper presented at, Oslo, Norway, 02/06/2014 - 03/06/2014, .

    Price Regulations in a Multi-unit Uniform Price Auction. / Boom, Anette.

    2014. Paper presented at The 9th Nordic Workshop in Industrial Organization. NORIO 2014, Oslo, Norway.

    Research output: Contribution to conferencePaperResearchpeer-review

    TY - CONF

    T1 - Price Regulations in a Multi-unit Uniform Price Auction

    AU - Boom,Anette

    PY - 2014

    Y1 - 2014

    N2 - Inspired by recent regulations in the New York ICAP market we examine the effect of different price regulations on a multi-unit uniform price auction. We investigate a bid cap and a bid foor. Given suffciently high total capacities general bid caps always ensure that the market price does not exceed the price cap whereas a selective bid cap for only the larger firms, does not guarantee this outcome. A sufficiently high bid floor always destroys pure strategy equilibria with equilibrium prices above the marginal costs, no matter whether the floor applies to all or only to relatively small firms.

    AB - Inspired by recent regulations in the New York ICAP market we examine the effect of different price regulations on a multi-unit uniform price auction. We investigate a bid cap and a bid foor. Given suffciently high total capacities general bid caps always ensure that the market price does not exceed the price cap whereas a selective bid cap for only the larger firms, does not guarantee this outcome. A sufficiently high bid floor always destroys pure strategy equilibria with equilibrium prices above the marginal costs, no matter whether the floor applies to all or only to relatively small firms.

    KW - Electricity

    KW - Capacity markets

    KW - Price regulation

    M3 - Paper

    ER -

    Boom A. Price Regulations in a Multi-unit Uniform Price Auction. 2014. Paper presented at The 9th Nordic Workshop in Industrial Organization. NORIO 2014, Oslo, Norway.