Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/82711
Authors: 
Holmberg, Pär
Year of Publication: 
2005
Series/Report no.: 
Working Paper, Department of Economics, Uppsala University 2005:16
Abstract: 
In a real-time electric power auction, the bids of producers consist of committed supply as a function of price. The bids are submitted under uncertainty, before the demand by the Independent System Operator has been realized. In the Supply Function Equilibrium (SFE), every producer chooses the supply function maximizing his expected profit given his residual demand. I consider a uniform-price auction with a reservation price, where demand is inelastic and exceed the market capacity with a positive probability, and firms have identical constant marginal costs but asymmetric capacities. I show that under these conditions, there is a unique SFE, which is piece-wise symmetric.
Subjects: 
supply function equilibrium
uniform-price auction
uniqueness
asymmetry
oligopoly
capacity constraint
wholesale electricity market
JEL: 
C62
D43
D44
L11
L13
L94
Document Type: 
Working Paper

Files in This Item:
File
Size
355.62 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.