Electricity industry revolutionized by efficient and competitive market equilibrium.
The article explores how the electricity industry's capacity market and product market interact. The researchers found that the two markets influence each other: the product market outcome affects bidding in the capacity market, and capacity sold in the capacity market impacts the product market. They discovered that a competitive equilibrium exists where suppliers bid based on their costs, leading to efficient outcomes. This equilibrium is crucial for ensuring a balance between capacity and actual production in the electricity industry.