Regulators have proposed various institutional alternatives to secure network resource adequacy and reasonably priced electric power for consumers. These alternatives prompt many difficult questions: Does the development of Demand Response reduce the need for new capacity? How effectively can a government-mandated Capacity Market foster efficient investment? How does centralized generator commitment (with revenue guarantees) compare to a system in which Generators voluntarily commit themselves with no revenue guarantees? If exclusive distribution contracts were replaced by unregulated retail competition, what would be the effects on investment and market prices? We use laboratory experiments to address these questions.
Bejarano, Hernan D., Lance Clifner, Carl Johnston, Stephen Rassenti, and Vernon L. Smith. "Resource Adequacy: Should Regulators Worry?." Review of Network Economics 11.4 (2012).
Walter de Gruyter