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A revenue-equivalence theorem for electricity auctions

Part of: Mathematical economics Game theory

Published online by Cambridge University Press:  14 July 2016

Juri Hinz
Juri Hinz*
Affiliation:
Universität Tübingen
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Abstract

The purpose of this paper is to analyse the real-time trading of electricity. We address a model for an auction-like trading which captures key features of real-world electricity markets. Our main result establishes that, under certain conditions, the expected total payment for electricity is independent of the particular auction type. This result is analogous to the revenue-equivalence theorem known for classical auctions and could contribute to an improved understanding of different electricity market designs and their comparison.

Keywords

Revenue equivalenceelectricity riskauction

MSC classification

Primary: 91B26: Market models (auctions, bargaining, bidding, selling, etc.)
Secondary: 91A40: Game-theoretic models 91B50: General equilibrium theory
Type
Research Papers
Information
Journal of Applied Probability , Volume 41 , Issue 2 , June 2004 , pp. 299 - 312
Copyright
Copyright © Applied Probability Trust 2004 

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