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An experimental investigation of soft price caps in uniform price auction markets for wholesale electricity

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  • Christian Vossler
  • Timothy Mount
  • Robert Thomas
  • Ray Zimmerman

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  • Christian Vossler & Timothy Mount & Robert Thomas & Ray Zimmerman, 2009. "An experimental investigation of soft price caps in uniform price auction markets for wholesale electricity," Journal of Regulatory Economics, Springer, vol. 36(1), pages 44-59, August.
    • Handle: RePEc:kap:regeco:v:36:y:2009:i:1:p:44-59
    DOI: 10.1007/s11149-009-9090-7
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    References listed on IDEAS

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    1. Natalia Fabra & Nils‐Henrik Fehr & David Harbord, 2006. "Designing electricity auctions," RAND Journal of Economics, RAND Corporation, vol. 37(1), pages 23-46, March.
    2. Natalia Fabra & Nils-Henrik M. von der Fehr & David Harbord, 2006. "Designing Electricity Auctions," RAND Journal of Economics, The RAND Corporation, vol. 37(1), pages 23-46, Spring.
    3. Smith, Vernon L, 1985. "Experimental Economics: Reply," American Economic Review, American Economic Association, vol. 75(1), pages 264-272, March.
    4. Jordi Brandts & Paul Pezanis‐Christou & Arthur Schram, 2008. "Competition with forward contracts: a laboratory analysis motivated by electricity market design," Economic Journal, Royal Economic Society, vol. 118(525), pages 192-214, January.
    5. Rassenti, Stephen J & Smith, Vernon L & Wilson, Bart J, 2003. "Discriminatory Price Auctions in Electricity Markets: Low Volatility at the Expense of High Price Levels," Journal of Regulatory Economics, Springer, vol. 23(2), pages 109-123, March.
    6. James Nicolaisen & Valentin Petrov & Leigh Tesfatsion, 2000. "Market Power and Efficiency in a Computational Electricity Market with Discriminatory Double-Auction Pricing," Computational Economics 0004005, University Library of Munich, Germany.
    7. Denton, Michael J. & Rassenti, Stephen J. & Smith, Vernon L., 2001. "Spot market mechanism design and competitivity issues in electric power," Journal of Economic Behavior & Organization, Elsevier, vol. 44(4), pages 435-453, April.
    8. Harris, Milton & Raviv, Artur, 1981. "Allocation Mechanisms and the Design of Auctions," Econometrica, Econometric Society, vol. 49(6), pages 1477-1499, November.
    9. Lynne Kiesling & Bart Wilson, 2007. "An experimental analysis of the effects of automated mitigation procedures on investment and prices in wholesale electricity markets," Journal of Regulatory Economics, Springer, vol. 31(3), pages 313-334, June.
    10. Krishna, Vijay, 2009. "Auction Theory," Elsevier Monographs, Elsevier, edition 2, number 9780123745071.
    11. Cox, James C & Smith, Vernon L & Walker, James M, 1984. "Theory and Behavior of Multiple Unit Discriminative Auctions," Journal of Finance, American Finance Association, vol. 39(4), pages 983-1010, September.
    12. Beck, Nathaniel & Katz, Jonathan N., 1995. "What To Do (and Not to Do) with Time-Series Cross-Section Data," American Political Science Review, Cambridge University Press, vol. 89(3), pages 634-647, September.
    13. Chapman, D. & Vossler, C. A. & Mount, T. D. & Barboni, V. & Thomas, R. J. & Zimmerman, R. D., 2004. "Market efficiency, competition, and communication in electric power markets: experimental results," Ecological Economics, Elsevier, vol. 48(3), pages 317-327, March.
    14. Wolak, Frank A., 2003. "Diagnosing the California Electricity Crisis," The Electricity Journal, Elsevier, vol. 16(7), pages 11-37.
    15. Abbink, Klaus & Brandts, Jordi & McDaniel, Tanga, 2003. "Asymmetric Demand Information in Uniform and Discriminatory Call Auctions: An Experimental Analysis Motivated by Electricity Markets," Journal of Regulatory Economics, Springer, vol. 23(2), pages 125-144, March.
    16. John Bernard & William Schulze & Timothy Mount, 2005. "Bidding behaviour in the multi-unit Vickrey and uniform price auctions," Applied Economics Letters, Taylor & Francis Journals, vol. 12(10), pages 589-595.
    17. Douglas D. Davis & Charles A. Holt, 1994. "Market Power and Mergers in Laboratory Markets with Posted Prices," RAND Journal of Economics, The RAND Corporation, vol. 25(3), pages 467-487, Autumn.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Sirin, Selahattin Murat & Camadan, Ercument & Erten, Ibrahim Etem & Zhang, Alex Hongliang, 2023. "Market failure or politics? Understanding the motives behind regulatory actions to address surging electricity prices," Energy Policy, Elsevier, vol. 180(C).
    2. Bastian Henze & Charles Noussair & Bert Willems, 2012. "Regulation of network infrastructure investments: an experimental evaluation," Journal of Regulatory Economics, Springer, vol. 42(1), pages 1-38, August.
    3. Vossler, Christian A. & Suter, Jordan F. & Poe, Gregory L., 2013. "Experimental evidence on dynamic pollution tax policies," Journal of Economic Behavior & Organization, Elsevier, vol. 93(C), pages 101-115.
    4. Chloé Coq & Henrik Orzen & Sebastian Schwenen, 2017. "Pricing and capacity provision in electricity markets: an experimental study," Journal of Regulatory Economics, Springer, vol. 51(2), pages 123-158, April.
    5. Kogan, Konstantin & Herbon, Avi, 2022. "Retailing under panic buying and consumer stockpiling: Can governmental intervention make a difference?," International Journal of Production Economics, Elsevier, vol. 254(C).
    6. Willems, Bert & Pollitt, Michael & von der Fehr, Nils-Henrik & Banet, Catherine, 2022. "The European Wholesale Electricty Market: From Crisis to Net Zero," Other publications TiSEM 2f225964-853e-4d30-a46d-0, Tilburg University, School of Economics and Management.
    7. Christoph Engel & Klaus Heine, 2017. "The dark side of price cap regulation: a laboratory experiment," Public Choice, Springer, vol. 173(1), pages 217-240, October.
    8. Khezr, Peyman & Nepal, Rabindra, 2021. "On the viability of energy-capacity markets under decreasing marginal costs," Energy Economics, Elsevier, vol. 96(C).
    9. Henze, B., 2016. "Laboratory experiments on the regulation of European network industries," Other publications TiSEM b18fcfca-2b95-4b01-91e2-0, Tilburg University, School of Economics and Management.
    10. Messer, Kent D. & Duke, Joshua M. & Lynch, Lori & Li, Tongzhe, 2017. "When Does Public Information Undermine the Efficiency of Reverse Auctions for the Purchase of Ecosystem Services?," Ecological Economics, Elsevier, vol. 134(C), pages 212-226.
    11. Wu, Shang & Palm-Forster, Leah H. & Messer, Kent D., 2021. "Impact of peer comparisons and firm heterogeneity on nonpoint source water pollution: An experimental study," Resource and Energy Economics, Elsevier, vol. 63(C).
    12. Sirin, Selahattin Murat & Erten, Ibrahim, 2022. "Price spikes, temporary price caps, and welfare effects of regulatory interventions on wholesale electricity markets," Energy Policy, Elsevier, vol. 163(C).

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    More about this item

    Keywords

    Soft cap auction; Uniform price auction; Electricity markets; Experimental auctions; L94; D44; C92;
    All these keywords.

    JEL classification:

    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior

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