Artikel
Financial contracts as coordination device
We study the use of financial contracts as bid-coordinating device in multi-unit uniform price auctions. Coordination is required whenever firms face a volunteer's dilemma in pricing strategies: one firm (the “volunteer") is needed to increase the market clearing price. Volunteering, however, is costly, as inframarginal suppliers sell their entire capacity whereas the volunteer only sells residual demand. We identify conditions under which signing financial contracts solves this dilemma. We test our framework exploiting data on contract positions by large producers in the New York power market. Using a Monte Carlo simulation, we show that the contracting strategy is payoff dominant and provide estimates of the benefits of such strategy.
- Sprache
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Englisch
- Erschienen in
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Journal: Journal of Economics & Management Strategy ; ISSN: 1530-9134 ; Volume: 29 ; Year: 2020 ; Issue: 2 ; Pages: 241-259 ; Hoboken, NJ: Wiley
- Klassifikation
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Wirtschaft
- Thema
-
auctions
coordination
electricity
forward markets
volunteer's dilemma
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Le Coq, Chloé
Schwenen, Sebastian
- Ereignis
-
Veröffentlichung
- (wer)
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Wiley
- (wo)
-
Hoboken, NJ
- (wann)
-
2020
- DOI
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doi:10.1111/jems.12340
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:43 MEZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Artikel
Beteiligte
- Le Coq, Chloé
- Schwenen, Sebastian
- Wiley
Entstanden
- 2020
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