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PRICE BIDS AND CAPACITY CHOICE IN ELECTRICITY MARKETS
Category: Economic Theory
Auctions III Tuesday 27th August 2002, 09:30 - 11:00, Room: 5.7
Session Chair(s):
Veronika Grimm, Humboldt University , GERMANY
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Abstract:
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This paper analyses offer prices and capacity choice by two asymmetric and capacity-constrained firms competing in a spot market for electricity with uniform auctions. Bertrand competition is limited to the case of low demand levels. For higher levels of demand, market clears at the price cap. In the capacity choice stage of the game, firms may restrain capacity. Strategic withholding is more likely when demand is known at the time where operators choose their available capacity, and is less likely when demand is a stochastic variable and values close to peak-hours occur with a high probability.
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Find this file in the \Papers\304\ folder of this CD-ROM.
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