Capacity Competition in Electricity Markets∗
نویسندگان
چکیده
We analyze a two-stage game where capacity constrained electricity generators first choose how much capacity they make available and then compete in a uniform price auction. We study how capacity withholding can be used strategically to enforce market power and how uniform auctions in the price game change the results of capacity constrained competition models. Our main finding is that the uniform auction procedure gives strong incentives to capacity restriction. At equilibrium, however, power shortage never occurs.
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