Short-term electricity market auction game analysis: uniform and pay-as-bid pricing

@article{Son2004ShorttermEM,
  title={Short-term electricity market auction game analysis: uniform and pay-as-bid pricing},
  author={You Seok Son and Ross Baldick and Kwang-Ho Lee and Shams Siddiqi},
  journal={IEEE Transactions on Power Systems},
  year={2004},
  volume={19},
  pages={1990-1998}
}
This paper analyzes the competing pricing mechanisms of uniform and pay-as-bid pricing in an electricity market. Game theory and auction theory are adopted to analyze the strategic behavior of a big player and a small player in a short-term auction game. Contrary to what would be expected from the conclusion of the "revenue equivalence theorem," we prove that for a two-player static game the Nash Equilibrium (NE) under pay-as-bid pricing will yield less total revenue in expectation than under… CONTINUE READING
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