|Title||The Effect of Customer Participation in Electricity Markets: An Experimental Analysis of Alternative Market Structures|
|Year of Publication||2004|
|Authors||Adilov, Nodir, Richard Schuler, William Schulze, and David Toomey|
|Keywords||consortium for electric reliability technology solutions (certs), energy analysis and environmental impacts department|
An experimental structure is demonstrated that represents end-use customers in electricity markets who can substitute part of their usage between day and night. Individuals' demand relationships are represented by a two-step value function for each period that are disaggregated from observed market demand relationships. Demand varies between day and night and during heat waves. Three alternative demandside market structures are evaluated:
Initial experiments were conducted with active demand-participants, but with a predetermined typical "hockey-stick" supply structure that was varied randomly, over eleven day-night pairs that included heat wave and supply shortages. The RTP structure resulted in the greatest market efficiency, despite the more difficult cognitive problem it poses for buyers. Furthermore, a preference poll comparing DRP and RTP was conducted after each trial; and while 64% of the participants said they preferred DRP before RTP experiments, 76% selected the RTP structure afterwards, a statistically significant reversal of preferences.