Abstract.
This paper examines the recently deregulated Irish electricity market. We ask: given this newly imposed institutional structure, does the availability of true marginal prices for electricity products affect the price/quantity bids submitted by market participants? First, we analyse the price movements within this market since 2007 to produce a model which best describes the data. Second, we test the auction design of the electricity markets experimentally. The current auction design is a static bidding framework. We find that if the auction were to operate under a sequential bidding auction, all market participants would benefit, as lower clearing prices would result.
JEL Codes: C50, C91, C92, D44.
Keywords: Auction design, electricity markets.
Click here to see a video presentation of the paper, click here to view a slideshow of my presentation at the 2nd Annual Economics and Psychology conference on November 6th in Dublin.