Scandinavian Working Papers in Economics
HomeAboutSeriesSubject/JEL codesAdvanced Search
Research Institute of Industrial Economics (IFN) Working Paper Series

No 812:
The Supply Function Equilibrium and Its Policy Implications for Wholesale Electricity Auctions

Pär Holmberg () and David Newbery

Abstract: The supply function equilibrium provides a game-theoretic model of strategic bidding in oligopolistic wholesale electricity auctions. This paper presents an intuitive account of current understanding and shows how welfare losses depend on the number of firms in the market and their asymmetry. Previous results and general recommendations for divisible-good/multi-unit auctions provides guidance on the design of the auction format; setting the reservation price; the rationing rule; and restrictions on the offer curves in wholesale electricity auctions.

Keywords: Wholesale Electricity Markets; Supply Function Equilibria; Competition Policy; (follow links to similar papers)

JEL-Codes: C62; D43; D44; L94; (follow links to similar papers)

45 pages, November 5, 2009

Before downloading any of the electronic versions below you should read our statement on copyright.
Download GhostScript for viewing Postscript files and the Acrobat Reader for viewing and printing pdf files.

Full text versions of the paper:

wp812.pdf    PDF-file
Download Statistics
This paper is published as:
Holmberg, Pär and David Newbery, (2010), 'The Supply Function Equilibrium and Its Policy Implications for Wholesale Electricity Auctions', Utilities Policy, Vol. 18, December, No. 4, pages 209-226

Questions (including download problems) about the papers in this series should be directed to Elisabeth Gustafsson ()
Report other problems with accessing this service to Sune Karlsson () or Helena Lundin ().

Programing by
Design by Joachim Ekebom

Handle: RePEc:hhs:iuiwop:0812 This page was generated on 2016-10-12 00:02:10