Alternative Auction Institutions for Purchasing Electric Power: An Experimental Examination

This paper reports on research being conducted by a combination of economists and electrical engineers at Cornell University who are examining potential auction institutions for restructured markets for electric power. As it is a report on developing results and analysis, the discussion remains general throughout. The research follows two related but independent strands. The first looks at the performance of various alternative auction mechanisms under different market sizes. The setting is a single sided auction with multiple units being offered and a vertical, multiple unit demand. This was conducted in the absence of a network, the equivalent of a system where transmission of electric power is lossless and costless.