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Información del Working Paper

On the use of pay-as-bid auctions in California: some criticisms and alternative proposal

C. Vázquez, M. Rivier, I.J. Pérez-Arriaga


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.

Fecha de Registro: 16/01/2024


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