Pay-as-Bid versus Marginal Pricing–Part II: Market Behavior Under Strategic Generator Offers
Why this work is in the frame
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Bibliographic record
Abstract
As the arguments for and against the use of pay-as-bid (PAB) or marginal pricing (MP) in electricity pools tend to be qualitative, we compare the quantitative behavior of the two markets assuming that generators submit the best strategic offers that correspond to the specified pricing method. In Part I of this two-part study, assuming that the system marginal costs for PAB and MP are random with known probability density functions, we develop generator strategic offers by maximizing the corresponding expected values of the generator profits over the offer parameters. In Part II, relations are established between the system marginal costs for each market type and a common random demand, thus allowing the two markets to be compared through the expected values and variances of the individual generation profits and of the consumer payments. This comparison demonstrates both theoretically and through simulation that: 1) he expected values of the individual generator profits as well as of the consumer payments are the same under MP and PAB and 2) the variances of the individual generator profits and of the consumer payments however are larger under MP than under PAB. The primary conclusion is then that although MP and PAB yield identical expected generator profits and consumer payments, the risk of not meeting these expected values is greater under MP than under PAB.
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Full frame distilled prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. Learned from the 10,348 direct Codex labels and 10,348 direct Gemma labels. Candidate is the union of thresholded teacher heads; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels or direct frontier model labels.
Codex and Gemma teacher scores by category
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.000 | 0.000 |
| Meta-epidemiology (narrow) | 0.000 | 0.000 |
| Meta-epidemiology (broad) | 0.000 | 0.000 |
| Bibliometrics | 0.000 | 0.001 |
| Science and technology studies | 0.000 | 0.000 |
| Scholarly communication | 0.000 | 0.000 |
| Open science | 0.000 | 0.000 |
| Research integrity | 0.000 | 0.000 |
| Insufficient payload (model declined to judge) | 0.000 | 0.000 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from it