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dc.contributor.authorCramton, Peter
dc.date.accessioned2007-08-07T13:59:41Z
dc.date.available2007-08-07T13:59:41Z
dc.date.issued2004-01
dc.identifier.citation"Competitive Bidding Behavior in Uniform-Price Auction Markets," Proceedings of the Hawaii International Conference on System Sciences, January 2004.
dc.identifier.urihttp://hdl.handle.net/1903/7058
dc.description.abstractProfit-maximizing bidding in uniform price auction markets involves bidding above marginal cost. It therefore is not surprising that such behavior is observed in electricity markets. This incentive to bid above marginal cost is not the result of coordinated action among the bidders. Rather, each bidder is independently selecting its bid to maximize profits based on its estimate of the residual demand curve it faces. The supplier bids a price for its energy capacity to optimize its marginal tradeoff between higher prices and lower quantities. Price response from either demand or other suppliers prevents the supplier from raising its bid too much. Profit maximizing bidding should be expected and encouraged by regulators. It is precisely this profit maximizing behavior that guides the market toward long-run efficient outcomes.en
dc.format.extent128892 bytes
dc.format.mimetypeapplication/pdf
dc.language.isoen_USen
dc.publisherHawaii International Conference on System Sciences
dc.subjectProfit-maximizing biddingen
dc.subjectUniform-price auction marketsen
dc.titleCompetitive Bidding Behavior in Uniform-Price Auction Marketsen
dc.typeArticleen
dc.relation.isAvailableAtDigital Repository at the University of Marylanden_us
dc.relation.isAvailableAtEconomics Departmenten_us
dc.relation.isAvailableAtCollege of Behavioral and Social Sciencesen_us
dc.relation.isAvailableAtUniversity of Maryland (College Park, Md.)en_us
dc.rights.licenseCopyright 2004 IEEE. Published in the Proceedings of the Hawai'i International Conference on System Sciences, January 5 - 8, 2004, Big Island, Hawaii.


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