<html><head><base href="x-msg://56/"></head><body style="word-wrap: break-word; -webkit-nbsp-mode: space; -webkit-line-break: after-white-space; "><div><blockquote type="cite"><span class="Apple-style-span" style="border-collapse: separate; font-family: Helvetica; font-size: medium; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: normal; orphans: 2; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-border-horizontal-spacing: 0px; -webkit-border-vertical-spacing: 0px; -webkit-text-decorations-in-effect: none; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px; "><div bgcolor="white" lang="EN-US" link="blue" vlink="purple"><div class="Section1"><p class="MsoNormal" style="margin-top: 0in; margin-right: 0in; margin-bottom: 12pt; margin-left: 0in; font-size: 12pt; font-family: 'Times New Roman', serif; color: black; ">The final Energy and Environmental Economics @ MIT seminar of the spring term has been changed to May 25:<o:p></o:p></p><p class="MsoNormal" align="center" style="margin-top: 0in; margin-right: 0in; margin-bottom: 12pt; margin-left: 0in; font-size: 12pt; font-family: 'Times New Roman', serif; color: black; text-align: center; "><b>Mar Reguant Rido<br>"Complex Bidding in Wholesale Electricity Markets"<br>Tuesday, May 25</b><br>10:30 a.m. - noon<br>E52-244 (Freeman Room)<o:p></o:p></p><div style="margin-top: 0in; margin-right: 0in; margin-bottom: 0.0001pt; margin-left: 0in; font-size: 12pt; font-family: 'Times New Roman', serif; color: black; "><b>Abstract: <span class="Apple-converted-space"> </span></b>In the presence of valuation complementarities, oftentimes auctions are designed so that bidders can better express these preferences by means of complementary bidding procedures. I study the welfare effects of a complementarity bidding mechanism in wholesale electricity auctions: "complex bids." Complex bids allow generating companies to link their valuations across different hours of the day, giving an horizontal dimension to an otherwise uniform auction. The market designer faces a trade off when choosing the design of the auction. Allowing for greater flexibility has the potential of improving production efficiency at the market, as bidders can better express cost complementarities. However, it also gives bidders another dimension to exert market power. I develop a model of complex bidding and present an empirical assessment of the welfare iplications of this form of bidding in the context of the Spanish electricity market. I estimate the model fundamentals, including the dynamic costs of operation of the firms, which allows me to perform a set of counterfactuals in which alternative market mechanisms are considered. Results suggest that the complex bidding mechanism performs better than its alternative simple bidding counterpart, even in the presence of strategic firms, although its full potential efficiency gains are partially offset by the exercise of market power.<span class="Apple-converted-space"> </span><br><br>Paper will be available one week prior to the talk at: <span class="Apple-converted-space"> </span><a href="http://econ-www.mit.edu/events/energy" style="color: blue; text-decoration: underline; ">http://econ-www.mit.edu/events/energy</a><o:p></o:p></div><div><div style="margin-top: 0in; margin-right: 0in; margin-bottom: 0.0001pt; margin-left: 0in; font-size: 12pt; font-family: 'Times New Roman', serif; color: black; ">--<span class="Apple-converted-space"> </span><br><span style="font-size: 10pt; font-family: Arial, sans-serif; color: rgb(102, 102, 102); ">Nancy L. Rose 50 Memorial Drive, E52-280B</span><span style="font-size: 10pt; color: rgb(102, 102, 102); "><br></span><span style="font-size: 10pt; font-family: Arial, sans-serif; color: rgb(102, 102, 102); ">Professor of Economics Cambridge, MA 02142-1347</span><span style="font-size: 10pt; color: rgb(102, 102, 102); "><br></span><span style="font-size: 10pt; font-family: Arial, sans-serif; color: rgb(102, 102, 102); ">MIT Department of Economics 617-253-8956</span><o:p></o:p></div></div></div></div></span></blockquote></div><br></body></html>