Estimating marginal costs and market power in the Italian electricity auctions

B. Bosco, L. Parisio, M. Pelagatti
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引用次数: 9

Abstract

In this paper we examine the bidding behaviour of firm competing in the Italian wholesale electricity market where generators submit hourly supply schedule to sell power. We describe the institutional characteristics of the Italian market and derive generators' equilibrium bidding functions. We also discuss the main empirical strategies followed by the recent econometrical literature to obtain estimates of (unobservable) optimal bids. Then, we use individual bid data, quantity volumes and other control variables to compare actual bidding behaviour to theoretical benchmarks of profit maximization. We obtain estimates of generators' costs to be used in conjunction with hourly market equilibrium prices to derive some measures of the extent of market power in the Italian electricity sector and of its exploitation by firms.
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估算意大利电力拍卖的边际成本和市场力量
本文研究了在意大利电力批发市场中,发电商提交小时供应计划以出售电力的投标行为。本文描述了意大利市场的制度特征,推导了发电商的均衡竞价函数。我们还讨论了最近计量经济学文献所遵循的主要经验策略,以获得(不可观察的)最优出价的估计。然后,我们使用单个投标数据、数量和其他控制变量来比较实际的投标行为和利润最大化的理论基准。我们获得了发电机成本的估计,并将其与每小时市场均衡价格结合使用,以得出意大利电力部门的市场力量程度及其被公司利用的一些措施。
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