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Using Laboratory Experiments to Design Efficient Market Institutions: Case of Wholesale Electricity Markets

23 Pages Posted: 29 Nov 2006  

Carine Staropoli

Université Paris I Panthéon-Sorbonne

Céline Jullien

INP Grenoble, ENSGI

Abstract

This paper assesses the contribution of laboratory experiments to the economics of design applied to the electricity industry. The analysis is dedicated to wholesale markets, and reviews the results accumulated to date concerning both the general architecture of power markets and the very details of the market rules or institution, that is the auction rule. We argue that these experimental results contribute to a better understanding of the performances properties and implementation features of competitive market designs and that experimental economics has proven very useful to public authorities to inform the restructuring of the electricity industry. It thus confirms the role of experimental economics as a complement to theoretical approaches in the design effort.

Suggested Citation

Staropoli, Carine and Jullien, Céline, Using Laboratory Experiments to Design Efficient Market Institutions: Case of Wholesale Electricity Markets. Annals of Public and Cooperative Economics, Vol. 77, No. 4, pp. 555-577, December 2006. Available at SSRN: https://ssrn.com/abstract=947942 or http://dx.doi.org/10.1111/j.1467-8292.2006.00319.x

Carine Staropoli (Contact Author)

Université Paris I Panthéon-Sorbonne ( email )

12, place du Panthéon
Paris, IL
France

Celine Jullien

INP Grenoble, ENSGI ( email )

46 avenue Félix Viallet
38031 Grenoble cedex 1
France

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