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 | Jahrestagung des Vereins fuer Socialpolitik 2015: Ökonomische Entwicklung - Theorie und Politik - Münster, Germany Duration: 6 Sept 2015 → 9 Sept 2015 https://www.socialpolitik.de/De/jahrestagung-2015 |
Conference
| Conference | Jahrestagung des Vereins fuer Socialpolitik 2015 |
|---|---|
| Country/Territory | Germany |
| City | Münster |
| Period | 06/09/2015 → 09/09/2015 |
| Internet address |
Keywords
- Electricity
- Capacity markets
- Price regulation