Convergence bids and market manipulation in the California electricity market
研究了电力市场中两种金融工具（收敛竞价与阻塞收益权）的相互作用如何为市场操纵提供激励，发现参与者更可能在持有阻塞收益权的节点上持有不盈利的收敛竞价，这种行为与操纵一致并导致市场效率损失。
Financial instruments are designed to improve the efficiency of a physical market in theory. In practice, underlying physical relationships may prevent financial instruments from working as intended. This paper analyzes the relationship between two financial instruments in electricity markets: convergence bidding and congestion revenue rights. Convergence bids allow participants to trade virtual power, whereas congestion revenue rights capture the value of congestion on a transmission line. Both instruments were introduced to solve inefficiencies, however the interaction of these two instruments provides incentives for manipulation. In this work I test whether the financial instruments are being used as intended. The results show that electricity market participants are more likely to hold unprofitable convergence bids on a node where the convergence bid can benefit the value of the congestion revenue rights held at that node. This type of uneconomic convergence bid is consistent with manipulative behavior. I then perform a back of the envelope calculation that shows these potentially manipulative convergence bids create inefficiencies in the market.