A market-based approach for enabling inter-area reserve exchange

Considering the sequential clearing of energy and reserves in Europe, enabling inter-area reserve exchange requires optimally allocating transmission capacities between these two markets. To achieve this, we provide a market-based allocation framework derive payments with desirable properties. The proposed min-max least core selecting individual rationality, budget balance, approximate incentive compatibility coalitional stability. results extend works on private discrete items to network continuous public choices.