market based instruments – workshop exercise feedback · exercise feedback – auction results...
TRANSCRIPT
![Page 1: Market Based Instruments – Workshop exercise feedback · Exercise feedback – Auction results Discriminatory $60.00, 3502 Ml 0.00 50.00 100.00 150.00 200.00 250.00 300.00 350.00](https://reader034.vdocument.in/reader034/viewer/2022042414/5f2e46c6d58a007d852311ee/html5/thumbnails/1.jpg)
RIRDC | CSIRO | BBG | GBCMA | DIPNR NSW
Market Based Instruments –Workshop exercise feedback
StructureStuart Whitten
CSIRO Sustainable Ecosystems
![Page 2: Market Based Instruments – Workshop exercise feedback · Exercise feedback – Auction results Discriminatory $60.00, 3502 Ml 0.00 50.00 100.00 150.00 200.00 250.00 300.00 350.00](https://reader034.vdocument.in/reader034/viewer/2022042414/5f2e46c6d58a007d852311ee/html5/thumbnails/2.jpg)
![Page 3: Market Based Instruments – Workshop exercise feedback · Exercise feedback – Auction results Discriminatory $60.00, 3502 Ml 0.00 50.00 100.00 150.00 200.00 250.00 300.00 350.00](https://reader034.vdocument.in/reader034/viewer/2022042414/5f2e46c6d58a007d852311ee/html5/thumbnails/3.jpg)
Exercise feedback
• Basic first price, sealed bid auction (discriminatory bid auction).
• Uniform price auction
• What if we got the metric wrong?
• Efficiency comparison
![Page 4: Market Based Instruments – Workshop exercise feedback · Exercise feedback – Auction results Discriminatory $60.00, 3502 Ml 0.00 50.00 100.00 150.00 200.00 250.00 300.00 350.00](https://reader034.vdocument.in/reader034/viewer/2022042414/5f2e46c6d58a007d852311ee/html5/thumbnails/4.jpg)
Exercise feedback – Auction results
Discriminatory$60.00, 3502 Ml
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total recharge
pric
e ($
/ML)
![Page 5: Market Based Instruments – Workshop exercise feedback · Exercise feedback – Auction results Discriminatory $60.00, 3502 Ml 0.00 50.00 100.00 150.00 200.00 250.00 300.00 350.00](https://reader034.vdocument.in/reader034/viewer/2022042414/5f2e46c6d58a007d852311ee/html5/thumbnails/5.jpg)
Exercise feedback – auction results
Discriminatory$60.00, 3502 MlUniform
$46.00, 2717 Ml
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Exercise feedback
• Last bid for first price auction sold at: $60/Ml
• We reduced recharge by 3502 Ml.
• Uniform price equivalent was: $46/Ml or 36%
• 43 bids were accepted as follows:
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Exercise feedbackFarm No. Farm No. Farm No.
3 19 303 19 304 20 314 20 315 21 325 22 339 22 3310 23 3610 24 3811 25 3814 25 4115 26 4116 26 4216 27 44
27 44
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Exercise feedback
Discriminatory$40.00, 5556
Uniform$30.00 4092
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total recharge (weighted)
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e ($
/ML)
![Page 9: Market Based Instruments – Workshop exercise feedback · Exercise feedback – Auction results Discriminatory $60.00, 3502 Ml 0.00 50.00 100.00 150.00 200.00 250.00 300.00 350.00](https://reader034.vdocument.in/reader034/viewer/2022042414/5f2e46c6d58a007d852311ee/html5/thumbnails/9.jpg)
Exercise feedback
• What if some of the farms are in fact twice as effective in reducing recharge as others?
• This changes our final bid price to: $40
• Uniform price equivalent was: $30
• We reduced recharge by 5556 and 4092 Ml respectively.
• It also changes who we pay with 8 and 29 now paid but several others now out.
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Exercise feedback
Discriminatory$60.00, 3502 Ml
$49.083752 Ml
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0 1000 2000 3000 4000 5000 6000
total recharge
pric
e ($
/ML)
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Exercise feedback
• How does the actual offer curve compare to a zero margin, zero transaction cost curve?
– Curve compares well but we pay more and get less recharge. This is expected in the real world too due to transaction costs.
• Did we achieve our 61% target?
– We only achieved 36% reduction – government controlled the budget.