2018/09/26 by Nathan Dahlin, Dahlin, Nathan, Rahul Jain +1
Computer Science · Decision Sciences · Engineering · #Auction Theory and Applications #Computer Science and Game Theory (cs.GT) #Electric Power System Optimization #FOS: Computer and information sciences #Smart Grid Energy Management #cs.GT
paper · pdf · doi:10.48550/arxiv.1809.09873
8 pages
openalex publication_date 2018/09/26 · arxiv created 2018/09/27 · arxiv updated 2018/10/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/28
We present a two stage auction mechanism that renewable generators (or aggregators) could use to allocate renewable energy among LSEs. The auction is conducted day- ahead. LSEs submit bids specifying their valuation per unit, as well as their real-time fulfillment costs in case of shortfall in generation. We present an allocation rule and a de-allocation rule that maximizes expected social welfare. Since the LSEs are strategic and may not report their private valuations and costs truthfully, we design a two-part payment, one made in Stage 1, before renewable energy generation level W is realized, and another determined later to be paid as compensation to those LSEs that have to be de-allocated in case of a shortfall. We proposes a two-stage Stochastic VCG mechanism which we prove is incentive compatible in expectation (expected payoff maximizing bidders will bid truthfully), individually rational in expectation (expected payoff of all participants is non-negative) and is also efficient. To the best of our knowledge, this is the first such two-stage mechanism for selling random goods.