Paper Title
A Simplified Model to Determine the Efficiency Effects of BID Preparation Costs

Abstract
A reversed multi-unit auction with bid preparation costs in the form of sunk pre-investments is modeled as a participation game, and the efficiency effects of bid preparation costs on the bid strategies and resulting prices is analyzed. In the scenarios considered, bid preparation costs have surprisingly strong effects, considerably inflating resulting prices and lowering welfare. The outcomes are relevant for the setup of the support regime for onshore wind developers in Germany (EEG 2014). Keywords - Auction Theory, Bid Preparation Costs, Effi¬ciency Costs