Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
9663684 | European Journal of Operational Research | 2005 | 19 Pages |
Abstract
In this paper, we analyze the ability of different auction structures to induce the efficient dispatch in a one-shot framework where generators know their own and competitors' costs with certainty. In particular, we are interested in identifying which, if any, rules in an auction structure yield only the efficient dispatch in equilibrium. We find that a critical component to a successful auction design is the way in which demand is bundled and hence the way bids are defined. While an auction mechanism which allows for more than one winner in an auction may support inefficient dispatches in equilibrium, we find that an auction where there is exactly one winner per lot, where the lots are formed to capture the cost structure of generation plants, and all lots are auctioned simultaneously, supports only efficient dispatches in equilibrium.
Related Topics
Physical Sciences and Engineering
Computer Science
Computer Science (General)
Authors
Wedad J. Elmaghraby,