Asymmetric Demand Information in Uniform and Discriminatory Call Auctions: An Experimental Analysis Motivated by Electricity Markets
University of Nottingham - School of Economics
Instituto de Analisis Economico (CSIC) Barcelona
Appalachian State University - Department of Economics
We study experimental multi-unit uniform and discriminatory auctions with demand uncertainty, motivated by the ongoing debate about market design in the electricity industry. We study the effect of asymmetric demand-information in the two auction institutions. In our treatment condition some sellers have less information than in our baseline conditions. In both conditions transaction prices and price volatility are not significantly different under the two auction institutions. However, under asymmetric information discriminatory auctions are significantly less efficient. These results are not in line with typical arguments made in favor of discriminatory pricing in electricity industries; namely, lower prices and less volatility.
Number of Pages in PDF File: 26
Keywords: Experiments, asymmetric information, discriminatory price auctions, uniform price auctions, electricity industries
JEL Classification: C90, D43, D82, K23, L94, Q41working papers series
Date posted: June 11, 2003
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