5 April 8 Auctioning and Updating - Today :Designand implementation Readingsfortoday:Goulder papers(required Phaneuf chapter(optional.Seesyllabusfor

5 April 8 Auctioning and Updating - Today :Designand...

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4/8/2014 1 Today: Brief discussion of auction design. Market based emissions regulation: Design and implementation. Readings for today: Goulder papers (required); Phaneuf chapter (optional). See syllabus for complete reference. Thursday: Stakeholder meeting!! Round 2 bids due tonight: Uniform price auction!! Round 1 : Pay as bid auction
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4/8/2014 2 HOUR 1 Wednesday Friday Demand : 11,013 MW Marginal Price : $41.50 Demand : 11,013 MW Marginal Price : $39.47 0 20 40 60 80 PRICE1 0 5000 10000 15000 20000 cummw 0 20 40 60 80 100 PRICE1 0 5000 10000 15000 20000 cummw Why are some firms bidding in at $0 when this is a payasbid auction??Is this a good strategy?
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4/8/2014 3 HOUR 3 Wednesday Friday Demand : 20,141 MW Marginal Price : $58 Demand : 20,141 MW Marginal Price : $447 (!!) 40 50 60 70 80 PRICE3 0 5000 10000 15000 20000 cummw 0 100 200 300 400 500 PRICE3 0 5000 10000 15000 20000 cummw Why is the price so different across Wednesday/Friday? HOUR 4 Wednesday Friday Demand : 17,059 MW Marginal Price : $55.94 Demand : 17,059 MW Marginal Price : $47 0 20 40 60 80 PRICE4 0 5000 10000 15000 20000 cummw 0 50 100 PRICE4 0 5000 10000 15000 20000 cummw
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4/8/2014 4 Quiz # 1 How (if at all) did your bidding strategy changebetween the uniform price auction (practiceround 0) and the pay as bid auction design(round 1)?Briefly explain the rationale for this change.
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4/8/2014 5 Multi unit auctions finance government debt To finance the public debt, the U.S. Treasury sells bonds, Treasury Inflation Protected Securities (TIPS), etc. to institutional and individual investors through public auctions. Treasury auctions occur regularly. Treasury accepts competitive bids in ascending order of their rate, yield, or discount margin (lowest to highest) until the quantity of awarded bids reaches the offering amount. Multi unit auctions – Treasury bills In both uniform and discriminatory auctions,bidders submit bid curves which specify howmany bonds they would purchase at a givenprice.
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