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 | Berlin Conference on Energy and Electricity Economics 2015: Cross-border Cooperations for Sustainable Energy Security - Theory and Policy Lessons from Different Sectors - DIW Berlin, Schumpeter Hall, Berlin, Germany Duration: 28 May 2015 → 29 May 2015 http://www.diw.de/de/diw_01.c.409266.de/forschung_beratung/projekte/projekt_homepages/masmie_modellieren_fuer_die_energiewende/nbsp_nbsp_veranstaltungen/nbsp_nbsp_veranstaltungen.html#429435 |
Conference
| Conference | Berlin Conference on Energy and Electricity Economics 2015 |
|---|---|
| Location | DIW Berlin, Schumpeter Hall |
| Country/Territory | Germany |
| City | Berlin |
| Period | 28/05/2015 → 29/05/2015 |
| Internet address |
Keywords
- Electricity
- Capacity markets
- Price regulation