Article ID: | iaor20061065 |
Country: | United States |
Volume: | 4 |
Issue: | 1 |
Publication Date: | Jan 2003 |
Journal: | INFORMS Transactions on Education |
Authors: | Felder Frank A., Farr John |
Keywords: | education in OR, spreadsheets |
This paper presents a spreadsheet model of an electricity market that can be used to simulate two types of auctions, a single price auction and a paid your bid auction. This model can be used in a variety of pedagogical applications. From the perspective of management science and operations research (MS/OR), this application emphasizes model use and integrates several important concepts. From a business perspective, users can explore various bidding strategies and their implications, depending on the auction rules. From a public policy perspective, students can learn how market design decisions may influence market outcomes and the exercise of market power.