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Market design when firms are privately informed about costs

In this paper, Pär Holmberg and Frank A. Wolak analyse how market design influences bidding behaviour in electricity markets with cost uncertainties. They show that competition improves for increased market transparency. Circumstances are identified under which uniform pricing increases market performance compared to discriminatory pricing.

Project manager
Pär Holmberg

+46 (0)8 665 4559
+46 (0)72 511 6866
par.holmberg@ifn.se

Project participants
Frank A. Wolak, Stanford University