As a long term bidding behavior, bid shading is exhibited by wind farms participating in real Uniform Price (UP) markets. This signifies that the wind farm owners bid far below their true long run marginal cost. In this paper, a method is proposed to consider the uncertainty of bidding admission in the long term expected revenue of wind farms. We show that this consideration could perfectly exp...

We investigate equilibrium strategies for bidding agents that participate in multiple, simultaneous second-price auctions with perfect substitutes. For this setting, previous research has shown that it is a best response for a bidder to participate in as many such auctions as there are available, provided that other bidders only participate in a single auction. In contrast, in this paper we con...

We analyze how market design influences the bidding behavior in multiunit procurement auctions where suppliers have uncertain costs and are uncertain about the availability of production units, as in wholesale electricity markets. We find that the competitiveness of market outcomes improves with increased market transparency. We identify circumstances where the auctioneer prefers uniform to dis...

We investigate equilibrium strategies for bidding agents that participate in multiple, simultaneous second-price auctions with perfect substitutes. For this setting, previous research has shown that it is a best response for a bidder to participate in as many such auctions as there are available, provided that other bidders only participate in a single auction. In contrast, in this paper we con...

This paper reviews both theoretical and empirical studies of financial transmission rights (FTRs) in the major U.S. wholesale power markets and provides a simple illustrative two-stage model to study the competitive behaviors of electricity generators (wholesale power sellers) and load serving entities (LSEs)(wholesale power buyers) and the welfare effects of FTRs in the restructuring U.S. whol...

If A is a set of social alternatives, a social choice rule (SCR) assigns a subset of A to each potential profile of individuals’ preferences over A, where the subset is interpreted as the set of ‘‘welfare optima’’. A game form (or ‘‘mechanism’’) implements the social choice rule if, for any potential profile of preferences, (i) any welfare optimum can arise as a Nash equilibrium of the game for...