RT Generic
T1 On the Impact of Forward Contract Obligations in Multi-Unit Auctions
A1 Frutos, María Ángeles de
A1 Fabra, Natalia
A2 Centre for Economic Policy Research, CEPR
AB Several regulatory authorities worldwide have recently imposed forwardcontract obligations on electricity producers as a way to mitigate their marketpower. In this paper we investigate how such contractual obligations affectequilibrium bidding in electricity markets, or in any other auction-basedmarket. For this purpose, we introduce forward contracts in a uniform-pricemulti-unit auction model with complete information. We find that forwardcontracts are pro-competitive when allocated to relatively large and efficientfirms; however, they might be anti-competitive otherwise. We also show thatan increase in contract volume need not always be welfare improving. From amethodological point of view, we aim at contributing to the literature on multiunitauctions with discrete bids.
SN 0265-8003
YR 2008
FD 2008-03
LK https://hdl.handle.net/10016/5010
UL https://hdl.handle.net/10016/5010
LA eng
DS e-Archivo
RD 5 may. 2024