Asymmetric Demand Information in Uniform and Discriminatory Call Auctions: An Experimental Analysis Motivated by Electricity Markets

Posted: 11 Jun 2003

See all articles by Klaus Abbink

Klaus Abbink

University of Nottingham - School of Economics

Jordi Brandts

Instituto de Analisis Economico (CSIC) Barcelona

Tanga McDaniel

Appalachian State University - Department of Economics

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Abstract

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.

Keywords: Experiments, asymmetric information, discriminatory price auctions, uniform price auctions, electricity industries

JEL Classification: C90, D43, D82, K23, L94, Q41

Suggested Citation

Abbink, Klaus and Brandts, Jordi and McDaniel, Tanga, Asymmetric Demand Information in Uniform and Discriminatory Call Auctions: An Experimental Analysis Motivated by Electricity Markets. Available at SSRN: https://ssrn.com/abstract=410221

Klaus Abbink

University of Nottingham - School of Economics ( email )

University Park
Nottingham, NG7 2RD
United Kingdom
44-115-95-14768 (Phone)
44-115-95-14159 (Fax)

Jordi Brandts (Contact Author)

Instituto de Analisis Economico (CSIC) Barcelona ( email )

UAB Campus
E-08193 Bellaterra
Spain

Tanga McDaniel

Appalachian State University - Department of Economics ( email )

Boone, NC 28608
United States

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