Issue: 2009/Vol.19/No.4, Pages 125-140
A COMPENSATION-BASED PRICING SCHEME IN MARKETS WITH NON-CONVEXITIES
Izabela Żółtowska
, Eugeniusz Toczyłowski
Cite as: I. Żółtowska, E. Toczyłowski. A compensation-based pricing scheme in markets with non-convexities. Operations Research and Decisions 2009: 19(4), 125-140.
Abstract
A compensation-based pricing scheme is a market clearing mechanism that may be applied when a uniform, linear pricing scheme cannot support equilibrium allocations in the auction markets. We analyze extensions of our previously proposed pricing scheme [14] to include various possible representations of bids that reflect some non-convex costs and constraints. We conclude with a discussion on directions for future research.
Keywords: auction design, electricity market, non-convex bids, minimum profit condition, unit commitment constraints
Received: Accepted: