Strategic Behaviour of Winning Bids in the Brazilian Transmission Auctions

摘要

This paper investigates the great di¤erence among the maximum reserve price established for the auctionsheld in the transmission electricity sector in Brazil and the observed winning bids, using a sample of data from2000 to 2008. We test the hypothesis that the high veri?ed markdown is a consequence of synergies, due toeconomies of scale in building and operating transmission facilities closely located. To this end, we analyzedreduced-based models, once transmission auctions are hybrids in format, consisting of a First Price Sealed Bidformat in the ?rst phase followed by an Descending Open Bid (English) auction in a contingent second phase.The empirical results showed that plenty of factors impact transmission lines winning bids. Among them, onecan cite the number of competitors, technology speci?cs of the undertakings, the maximum reserve price, therequired investments, and, mainly, the location of the lines. This last factor indicates that synergies are in facta relevant constituent of the current Brazilian transmission lines competitive scenario.