Gilbert, Richard; Neuhoff, Karsten; Newbery, David - In: RAND Journal of Economics 35 (2004) 4, pp. 691-709
Whether transmission contracts increase or mitigate market power depends crucially on the allocation of transmission rights. In an efficiently arbitraged uniform-price auction, generators will only obtain contracts that mitigate their market power. Contracts inherited or bought in a "pay-as-bid"...