This document presents some ideas regarding the use of the pay-as-bid pricing rule in multi-unit auctions. In particular, we focus on electricity markets and on the proposals for adopting this kind of mechanism in the California Power Exchange. We find that the pay-as-bid auction has important drawbacks. Instead, we attack the recent problems in California from another point of view and propose an alternative solution.
Keywords: No disponible/Not available
The Electricity Journal. Volume: 14 Issue: 4 Pages: 41-48
DOI reference: 10.1016/S1040-6190(01)00196-8
Published on paper: May 2001.