Greve, T. and Pollitt, M.

Network Procurement Auctions

CWPE1347

Abstract: In most network asset procurement exercises, network configurations are predefined by the auctioneers. Bidders can neither propose different network configurations nor can they submit bids on a group of network links. We believe the market itself can be designed better. We present a lot structure and an auction design where bidders might propose and build different network configurations and where bidding for packages is a possibility. We demonstrate why the auction design in this paper should be considered for future network procurement exercises through an example, inspired by UK offshore electricity transmission assets, to illustrate our idea.

Keywords: Auctions, Networks, Investments

JEL Codes: D44 D85

Author links: Michael Pollitt

PDF: https://www.econ.cam.ac.uk/research-files/repec/cam/pdf/cwpe1347.pdf