Prof. Peter Cramton, Ph.D.

International Research Fellow

Peter Cramton, an Emeritus Professor of Economics at the University of Maryland, is a leading researcher in market design since 1983. His research on auctions and market design, focusing on the design of complex markets, spans a wide range of industries, including electricity marketsfinancial markets, and communications markets, where he has introduced innovative market designs. Numerous governments have sought Cramton's counsel, and he has advised dozens of bidders in major auctions. He serves as an advisor and chief economist to several companies. From 2015-2021, he served as an independent director of the Electric Reliability Council of Texas (ERCOT) board. He earned his BS in Engineering from Cornell University and his PhD in Business from Stanford University.

Peter Cramton's work on electricity market design began with an influential report that identified flaws in the market rules proposed for ISO New England (Cramton and Wilson 1998). The work proposed solutions that would better address market objectives. Over the next decade, these recommendations were adopted in the stakeholder process, sometimes after significant problems were observed in practice. The need for capacity market performance incentives is a prime example. Cramton advised on the design of capacity markets in North America, Europe, and South America, contributing many influential papers on the topic (Cramton 2003Cramton and Stoft 2005200620072008Cramton and Ockenfels 2012Cramton et al. 2013). Cramton 2017 presents an overview of electricity market design.

Peter Cramton's recent research has addressed the critical market failures that have hindered efficient investment and stifled innovation in electricity markets: incomplete markets, market power, uncertainty, and poor trading technologies (Cramton et al. 2024). This research, once adopted, holds the promise to expedite the net zero transition. It leverages straightforward and robust market designs that foster innovation and competition, bringing the necessary flexibility for reliable and resilient electricity in a setting with high renewable penetration. The research identifies the need and feasibility of involving the demand side (Cramton et al. 2023), particularly during extreme weather (Cramton 2022). Such a market significantly enhances price incentives, enabling efficient investment and operation of participants' resources and benefiting retail consumers. The result is a net-zero economy that provides reliable and resilient electricity at the least cost.

More details are available at cramton.umd.eduGoogle Scholar citations, and Wikipedia.

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