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.

Conference

ConferenceThe 12th Annual International Industrial Organization Conference. IIOC 2014
Number12
LocationNorthwestern Law Searle Center on Law, Regulation and Economic Growth
CountryUnited States
CityChicago, IL
Period11/04/201413/04/2014
Internet address

Bibliographical note

CBS Library does not have access to the material

Keywords

    Cite this

    Boom, A. (2014). Price Regulations in a Multi-unit Uniform Price Auction. Paper presented at The 12th Annual International Industrial Organization Conference. IIOC 2014, Chicago, IL, United States.
    Boom, Anette. / Price Regulations in a Multi-unit Uniform Price Auction. Paper presented at The 12th Annual International Industrial Organization Conference. IIOC 2014, Chicago, IL, United States.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",
    note = "CBS Library does not have access to the material; null ; Conference date: 11-04-2014 Through 13-04-2014",
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    Boom, A 2014, 'Price Regulations in a Multi-unit Uniform Price Auction' Paper presented at, Chicago, IL, United States, 11/04/2014 - 13/04/2014, .

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

    2014. Paper presented at The 12th Annual International Industrial Organization Conference. IIOC 2014, Chicago, IL, United States.

    Research output: Contribution to conferencePaperResearchpeer-review

    TY - CONF

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

    AU - Boom,Anette

    N1 - CBS Library does not have access to the material

    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 12th Annual International Industrial Organization Conference. IIOC 2014, Chicago, IL, United States.