An introduction to electricity market auctions using a spreadsheet

An introduction to electricity market auctions using a spreadsheet

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Article ID: iaor20061065
Country: United States
Volume: 4
Issue: 1
Publication Date: Jan 2003
Journal: INFORMS Transactions on Education
Authors: ,
Keywords: education in OR, spreadsheets
Abstract:

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.

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