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Book/Printed Material Understanding strategic bidding in restructured electricity markets a case study of ERCOT

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Title

  • Understanding strategic bidding in restructured electricity markets a case study of ERCOT

Summary

  • "We examine the bidding behavior of firms competing on ERCOT, the hourly electricity balancing market in Texas. We characterize an equilibrium model of bidding into this uniform-price divisible-good auction market. Using detailed firm-level data on bids and marginal costs of generation, we find that firms with large stakes in the market performed close to theoretical benchmarks of static, profit-maximizing bidding derived from our model. However, several smaller firms utilized excessively steep bid schedules that deviated significantly from our theoretical benchmarks, in a manner that could not be empirically accounted for by the presence of technological adjustment costs, transmission constraints, or collusive behavior. Our results suggest that payoff scale matters in firms' willingness and ability to participate in complex, strategic market environments. Finally, although smaller firms moved closer to theoretical bidding benchmarks over time, their bidding patterns contributed to productive inefficiency in this newly restructured market, along with efficiency losses due to the close-to optimal exercise of market power by larger firms"--National Bureau of Economic Research web site.

Names

  • Hortaçsu, Ali
  • Puller, Steven L.
  • National Bureau of Economic Research

Created / Published

  • Cambridge, MA : National Bureau of Economic Research, c2005.

Headings

  • -  Electric utilities--Deregulation--Texas
  • -  Electric utilities--Prices--Texas
  • -  Letting of contracts--Texas

Notes

  • -  Title from PDF file as viewed on 2/25/2005.
  • -  Includes bibliographical references.
  • -  Also available in print.
  • -  Mode of access: World Wide Web.
  • -  System requirements: Adobe Acrobat Reader.

Call Number/Physical Location

  • HB1

Digital Id

Library of Congress Control Number

  • 2005616859

Access Advisory

  • Unrestricted online access

Online Format

  • image
  • pdf

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Cite This Item

Citations are generated automatically from bibliographic data as a convenience, and may not be complete or accurate.

Chicago citation style:

Hortaçsu, Ali, Steven L Puller, and National Bureau Of Economic Research. Understanding strategic bidding in restructured electricity markets a case study of ERCOT. Cambridge, MA: National Bureau of Economic Research, 2005. Pdf. https://aj.sunback.homes/item/2005616859/.

APA citation style:

Hortaçsu, A., Puller, S. L. & National Bureau Of Economic Research. (2005) Understanding strategic bidding in restructured electricity markets a case study of ERCOT. Cambridge, MA: National Bureau of Economic Research. [Pdf] Retrieved from the Library of Congress, https://aj.sunback.homes/item/2005616859/.

MLA citation style:

Hortaçsu, Ali, Steven L Puller, and National Bureau Of Economic Research. Understanding strategic bidding in restructured electricity markets a case study of ERCOT. Cambridge, MA: National Bureau of Economic Research, 2005. Pdf. Retrieved from the Library of Congress, <aj.sunback.homes/item/2005616859/>.