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.
| Original language | English |
|---|---|
| Publication date | 2015 |
| Number of pages | 32 |
| Publication status | Published - 2015 |
| Event | 10th International Conference on Competition and Regulation: Advances in the Analysis of Competition Policy and Regulation - Rethymnon, Greece Duration: 5 Jul 2015 → 7 Jul 2015 Conference number: 10 http://www.cresse.info/default.aspx?articleID=5710 |
Conference
| Conference | 10th International Conference on Competition and Regulation |
|---|---|
| Number | 10 |
| Country/Territory | Greece |
| City | Rethymnon |
| Period | 05/07/2015 → 07/07/2015 |
| Internet address |
Keywords
- Electricity
- Capacity markets
- Price regulation