Gilbert, Richard; Neuhoff, Karsten; Newbery, David M. G. - 2013
We ask under what conditions transmission contracts increase or mitigate market power. We show that the allocation … contracts that mitigate their market power. However, if generators inherit transmission contracts or buy them in a 'pay …-as-bid' auction, then these contracts can enhance market power. In the two-node network case banning generators from holding …