Applying experiments to auctions in electricity markets

We analyze the bidding behavior in a single sided uniform auction and in a pay-as-bid auction using an experimental approach. This study focuses on the impact of the risk attitude of participating subjects. The experiments are conducted under a stable demand environment and with homogeneous groups consisting each of five participants either with a complete risk seeking or a complete risk averse attitude. The results show that a uniform auction is significantly affected by risk attitude of the participants. Standard deviation of efficiency and prices are higher when playing with risk averse participants. Compared to other existing literature on experimental economics, our results differ substantially and show that risk attitude of participants is a factor that needs to be taken into account especially when conducting experiments with small groups.