3 ms·
What you will accomplish with trying that is that producers will bid what they expect the price to be, instead of their production cost. Thus we still get the m
by Gwypaas 4y ago
What you will accomplish with trying that is that producers will bid what they expect the price to be, instead of their production cost. Thus we still get the marginal cost like all other raw resource markets, but with extra complications.
That is a much less efficient system with larger risks.
- Al-Khwarizmi 4y agoThey already do that with the existing system. It often happened in Spain (pre Iberian exception) that gas isn't even used, but the price of hydro was set to something like (expected price of gas - 5 €) because they knew they could. So we end up paying the price of gas even when we don't use gas! Honestly, some people talk about the existing system as if it's this perfect free market... but in practice the bar is very low. The Iberian exception system is already showing in practice that it works better.